Microsoft Share Price Forecast March 2022 – Time to Buy MSFT?
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Shares of Microsoft (NASDAQ: MSFT) are in the red today, after closing at $289.86 as of March 4th (19:59 EST). Microsoft shares have thrived even as investors flocked to “reopening” stocks, largely at the expense of many cloud-centric stocks.
Microsoft – Technical Analysis
According to the financial statement released by Microsoft, the market cap of the company is $2.173 trillion, with total assets worth $340.389 billion. Revenue for 2020 was at $168.09 billion with a profit margin of 36.45% compared to $143.01 billion in 2019.
Moving averages such as Exponential Moving Average (10)(294.72), Simple Moving Average (10)(292.75), Exponential Moving Average (20)(296.93), Simple Moving Average (20)(296.67) and Exponential Moving Average (30)(299.86) are indicating a sell action. Oscillators such as Relative Strength Index (14)(42.94), Stochastic %K (14, 3, 3)(69.58), Commodity Channel Index (20)(−73.13) and Average Directional Index (14)(35.15) are neutral.
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Recent Developments
Microsoft currently produces the popular Xbox gaming console, with its latest addition a big hit. Both the Xbox Series X and S consoles led to a 17.7% increase in Microsoft’s gaming revenue in 2021 to $16.3 billion. Hardware revenue from Xbox increased by 63.3%, due to growing demand for its consoles. Analysts now expect the Xbox Series X console to hit annual shipments of 37 million units in 2024. This would be a huge improvement over last year’s estimated shipments of 12 million units.
Microsoft has recently acquired ZeniMax which is the parent company of popular gaming studio Bethesda. The deal which was worth $7.5 billion in March last year, led to Microsoft getting access to Doom, Elder Scrolls, Fallout, Wolfenstein and other popular game titles. It is also in the process of acquiring Activision Blizzard for $68.7 billion acquisition.
Microsoft’s revenue for the fourth quarter increased 20% year over year to reach $51.7 billion. This consists of Microsoft’s intelligent cloud segment, which grew 26%, while productivity and business jumped 19% and more personal computing climbed 15%. It has a profit margin of more than 38%. Microsoft’s dividend has grown by more than 200% in the last ten years. Microsoft has also started taking advantage of the metaverse and other emerging tech trends. Its net income has increased by 21% year over year.
Should You Buy MSFT Shares?
Microsoft shares are currently trading at 30 times earnings. Right now, its cloud business is its biggest source of revenue, accounting for 35% of the company’s top line in the most recent quarter. This is largely due to Microsoft being the second-largest public cloud service provider globally. It has already started eating into Amazon’s market share. Given its current growth rate, it wouldn’t be surprising to see the company bolstering its position in the cloud computing market.
Microsoft is currently the leader in SaaS, with the company flexing its muscles across the SaaS market. This has helped Microsoft entrench its dominance beyond its Office suite leadership. It has also increased its multi-cloud offering for its enterprise customers. Using GCP and AWS has allowed Microsoft to deliver its cloud security offering to its multi-cloud customer.
The time has arrived for Microsoft shares to experience a steep and meaningful correction. Investors will be thrilled with its attractive valuation and solid underlying thesis. The dividend yield for Microsoft shares is low at 0.84%. However, Microsoft is far greater than any normal dividend stock as it has returned dividends of 62% over the past two years and more than 800% over the past decade. Considering this now is a good time to buy Microsoft shares.
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