Microsoft Earnings – A Look At Past Numbers & Expectations For Today

Reporting earnings after the close today is one of the major tech names on most calendars, Microsoft. With tech stocks encountering a bit of a pullback in recent weeks, even Microsoft's stock has not been immune, with a 6.5% retracement over the past month.

With earnings looming large, we take a look at the previous numbers, as well as what is expected from the firm today.

As we can see, the recent trend set by the tech juggernaut has been for beats on both EPS and Revenues, with EPS hovering just under $3 over the past year. Revenues are showing solid growth, and are expected to deliver again after the close when Microsoft drops numbers. The firm also goes into earnings on the back of a target upgrade from BofA.

Bank of America analysts have revised their price target on the Microsoft's stock (NASDAQ: MSFT) upwards from $480 per share to $510 per share. This revision represents a notable potential upside of 20% from the stock’s recent trading level.

Bank of America maintained its “buy” rating for Microsoft, a stance shared by the consensus of analysts. Out of 35 analyst opinions, the common verdict is that Microsoft shares are a “buy”. This agreement among experts often serves as a reassuring nod for potential investors who rely on these ratings for making informed decisions.

The rationale behind this optimistic price adjustment stems from various growth factors identified by Bank of America's analysts. Expectations for a robust third quarter have been voiced, presumably backed by Microsoft's consistent financial performance. Moreover, the sustained growth of Azure, Microsoft's cloud computing service, paints a promising picture of the company's expansion in the cloud industry. Azure's performance is crucial given the increased reliance on cloud solutions across various industries globally.

Additionally, Bank of America pointed to the solid performance of Office 365 as another critical factor. Microsoft's suite of productivity applications continues to see widespread usage among individuals and businesses alike, driving steady revenue streams. Lastly, expected growth in the More Personal Computing segment, which includes Windows, devices, gaming, and search advertising, contributes to a well-rounded thesis supporting the stock's growth potential.

Investors might view the recent pullback as a buying opportunity, especially in light of the strong vote of confidence from Bank of America amid anticipated future growth. As always, volatility can be expected around earnings, and you would be well served taking some time to do proper analysis rather than jumping in. We, like most others will be tuning in for this anticipated call.