Microsoft Corporation - Revision history

86.20.163.149: pounds to dollars

2023-07-28T14:54:43Z

pounds to dollars

← Older revision		Revision as of 15:54, 28 July 2023
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	==== Market Capitalisation ====		==== Market Capitalisation ====
	\|-		\|-
	\|Current Market Capitalisation		\|Current Market Capitalisation($)
	\|2.593T		\|2.593T
	\|As at 27th July 2023, the current value of Microsoft Corporation is £2.593 Trillion<ref>https://uk.finance.yahoo.com/quote/MSFT?p=MSFT</ref>.		\|As at 27th July 2023, the current value of Microsoft Corporation is $2.593 Trillion<ref>https://uk.finance.yahoo.com/quote/MSFT?p=MSFT</ref>.
	\|-		\|-
	\|Which time period do you want to use to estimate the expected return?		\|Which time period do you want to use to estimate the expected return?

86.20.163.149: detail - sensitivity analysis

2023-07-28T14:35:07Z

detail - sensitivity analysis

← Older revision		Revision as of 15:35, 28 July 2023
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	\|}		\|}

	==== Sensitivity Analysis applied to Microsoft Stock ====		==== Sensitivity Analysis applied to Microsoft Stock - Expected returns over the next 5 years ====
	{\| class="wikitable"		{\| class="wikitable"
	!Main input		!Main input

>Maanas: /* Risks */ formatting changes

2023-07-28T05:12:13Z

Risks: formatting changes

← Older revision		Revision as of 06:12, 28 July 2023
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	* Hiked interest rates to combat inflation result in increased debt, affecting growth plans.		* Hiked interest rates to combat inflation result in increased debt, affecting growth plans.
	* Microsoft's operations could be adversely affected by events outside of its control, such as natural disasters, wars or health epidemics.		* Microsoft's operations could be adversely affected by events outside of its control, such as natural disasters, wars or health epidemics.


	=== Uncertain forecasts: ===		=== Uncertain forecasts: ===
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	* There is no guarantee that Microsoft will have sufficient cash flow from its business to pay its indebtedness or that it will not incur additional indebtedness.		* There is no guarantee that Microsoft will have sufficient cash flow from its business to pay its indebtedness or that it will not incur additional indebtedness.
	* Microsoft may fail to meet its publicly announced guidance or other expectations about its business, which could cause its stock price to decline.		* Microsoft may fail to meet its publicly announced guidance or other expectations about its business, which could cause its stock price to decline.


	=== Competition: ===		=== Competition: ===
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	* If Microsoft is unable to attract and retain key employees and C-suite members, it could affect Microsoft's ability to innovate and maintain its competitive edge.		* If Microsoft is unable to attract and retain key employees and C-suite members, it could affect Microsoft's ability to innovate and maintain its competitive edge.
	* Microsoft's cloud services, including Azure and its many subsidies, have seen rapid growth, but maintaining high levels of service reliability and uptime is crucial. It faces intense competition so downtime, technical issues or poor customer service could result in lost revenue and damage the company's reputation.		* Microsoft's cloud services, including Azure and its many subsidies, have seen rapid growth, but maintaining high levels of service reliability and uptime is crucial. It faces intense competition so downtime, technical issues or poor customer service could result in lost revenue and damage the company's reputation.


	=== Regulatory and Legal Challenges: ===		=== Regulatory and Legal Challenges: ===
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	* Microsoft may not be able to protect its source code from being copied if there is an unauthorised disclosure.		* Microsoft may not be able to protect its source code from being copied if there is an unauthorised disclosure.
	* Third parties may claim that Microsoft is infringing their IP rights.		* Third parties may claim that Microsoft is infringing their IP rights.


	=== Supply chain: ===		=== Supply chain: ===
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	* The scarcity of silicon chips could cause Microsoft to experience delays in launching of its products and services – hardware or software, as they all depend on these chips. Microsoft may also experience an increase in manufacturing costs due to this.		* The scarcity of silicon chips could cause Microsoft to experience delays in launching of its products and services – hardware or software, as they all depend on these chips. Microsoft may also experience an increase in manufacturing costs due to this.
	* Microsoft's suppliers may fail to deliver components according to schedules, prices, quality, and volumes that are acceptable, or Microsoft may be unable to manage these components effectively.		* Microsoft's suppliers may fail to deliver components according to schedules, prices, quality, and volumes that are acceptable, or Microsoft may be unable to manage these components effectively.


	=== Other: ===		=== Other: ===

>Maanas: /* Risks */ formatting changes

2023-07-28T05:11:17Z

Risks: formatting changes

← Older revision		Revision as of 06:11, 28 July 2023
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	* Microsoft's operating system, Windows, and the Office suites have been among its core revenue drivers, but as the tech world evolves, Microsoft would need to diversify and reduce its dependence on these traditional offerings.		* Microsoft's operating system, Windows, and the Office suites have been among its core revenue drivers, but as the tech world evolves, Microsoft would need to diversify and reduce its dependence on these traditional offerings.
	* Developing new technologies is complex. It can require long development and testing periods. Significant delays in new releases or significant problems in creating new products or services could adversely affect our revenue.		* Developing new technologies is complex. It can require long development and testing periods. Significant delays in new releases or significant problems in creating new products or services could adversely affect our revenue.



	=== Summary of Risks and Microsoft's Risk Management Strategy: ===		=== Summary of Risks and Microsoft's Risk Management Strategy: ===

>Maanas: /* Summary of Risks and Microsoft's Risk Management Strategy: */

2023-07-28T05:09:26Z

Summary of Risks and Microsoft's Risk Management Strategy:

← Older revision		Revision as of 06:09, 28 July 2023
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	* Microsoft's operating system, Windows, and the Office suites have been among its core revenue drivers, but as the tech world evolves, Microsoft would need to diversify and reduce its dependence on these traditional offerings.		* Microsoft's operating system, Windows, and the Office suites have been among its core revenue drivers, but as the tech world evolves, Microsoft would need to diversify and reduce its dependence on these traditional offerings.
	* Developing new technologies is complex. It can require long development and testing periods. Significant delays in new releases or significant problems in creating new products or services could adversely affect our revenue.		* Developing new technologies is complex. It can require long development and testing periods. Significant delays in new releases or significant problems in creating new products or services could adversely affect our revenue.

	=== Summary of Risks and Microsoft's Risk Management Strategy: ===		=== Summary of Risks and Microsoft's Risk Management Strategy: ===

>Maanas: added risks section

2023-07-28T05:05:50Z

added risks section

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 |38%
 |}
 == Catalysts ==

>SuhuaLuo: industry overview

2023-07-28T04:29:59Z

industry overview

← Older revision		Revision as of 05:29, 28 July 2023
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	== Market ==		== Market ==
			'''Industry Chain Analysis'''

			The technology industry's value chain involves hardware manufacturers, software developers, cloud service providers, and other technology-related businesses. Microsoft's position spans multiple segments, but its significant revenue drivers include cloud computing and software services. In the cloud sector, Microsoft competes with companies like Amazon Web Services (AWS) and Google Cloud. In software, it faces competition from companies like Oracle, SAP, and Salesforce. Understanding the competitive landscape and profitability of these segments is essential in evaluating Microsoft's growth potential.

			'''Industry's Key Drivers'''

			a. Technological Advancements: The industry's foundation lies in pushing the boundaries of innovation. Advancements in hardware, software, and emerging technologies like artificial intelligence, blockchain, and quantum computing fuel the growth of the industry.

			b. Digital Transformation: Businesses worldwide are undergoing digital transformation to remain competitive. This transformation demands technology products and services, ranging from cloud computing to automation tools, which are provided by companies like Microsoft.

			c. Increasing Connectivity: The rise of the internet and the growing number of connected devices through IoT drive the demand for tech solutions to manage and analyze the vast amounts of data generated.

			d. Evolving Consumer Behavior: Consumer preferences have shifted towards digital experiences, leading to increased demand for software applications, online services, and entertainment platforms.

			'''Industry's Trend'''

			Investment in most tech trends tightened year over year, but the potential for future growth remains high, as further indicated by the recent rebound in tech valuations. Indeed, absolute investments remained strong in 2022, at more than $1 trillion combined, indicating great faith in the value potential of these trends. Driven by the growing demand for digital solutions, cloud services, and AI-driven applications, the tech industry is likely to continue its growth trajectory. Microsoft's strong focus on cloud computing, along with its strategic partnerships and acquisitions, puts it in a good position to capitalize on these trends. Also, as some technologies become more profitable, they can often scale further with lower marginal investment.

	== Financials<ref>https://www.microsoft.com/en-us/Investor/annual-reports.aspx</ref> ==		== Financials<ref>https://www.microsoft.com/en-us/Investor/annual-reports.aspx</ref> ==

>Yuhang at 23:10, 27 July 2023

2023-07-27T23:10:34Z

← Older revision		Revision as of 00:10, 28 July 2023
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	In a strategic pivot, Microsoft embraced the subscription-based revenue model, epitomized by offerings such as Microsoft 365 and Xbox Game Pass. By adopting this approach, Microsoft ensured a steady and predictable income stream, while simultaneously fostering customer loyalty. The subscription model facilitated seamless software updates and enhanced user experiences, further fueling Microsoft's growth and market penetration.		In a strategic pivot, Microsoft embraced the subscription-based revenue model, epitomized by offerings such as Microsoft 365 and Xbox Game Pass. By adopting this approach, Microsoft ensured a steady and predictable income stream, while simultaneously fostering customer loyalty. The subscription model facilitated seamless software updates and enhanced user experiences, further fueling Microsoft's growth and market penetration.

			For instance, one of Microsoft's most well-known subscription-based services, is Microsoft 365. This subscription service, which was formerly known as Office 365, provides a variety of productivity programs, including Word, Excel, PowerPoint, Outlook, and more, as well as cloud storage through OneDrive and teamwork software like Microsoft Teams. Customers pay a regular subscription price to gain access to the most recent versions and upgrades rather than buying individual licenses for these goods.

			Moreover, Xbox Game Pass is another subscription-based business model in the gaming sector. For a monthly subscription fee, this service enables Xbox console and PC users to access a vast collection of games. On the day of its release, it features first-party Microsoft games, adding value and promoting further player interaction.

	'''b) Stock Buybacks and Dividends'''		'''b) Stock Buybacks and Dividends'''

	Microsoft's commitment to returning value to shareholders through stock buybacks and dividends has been a cornerstone of its financial stability and investor confidence. Regular dividend payments and well-executed share buyback programs have demonstrated the company's robust financial position and dedication to rewarding shareholders.		Microsoft's commitment to returning value to shareholders through stock buybacks and dividends has been a cornerstone of its financial stability and investor confidence. Regular dividend payments and well-executed share buyback programs have demonstrated the company's robust financial position and dedication to rewarding shareholders.

			For example, the share repurchase programs, which include Microsoft purchasing its own outstanding shares on the open market, have been used by the company in the past. The goal of this procedure is to decrease the number of outstanding shares, which will raise the value of the remaining shares and convey faith in the company's financial stability. Microsoft has announced numerous buyback schemes throughout the years.

			What's more, Microsoft also has its own capital allocation strategy in its annual reports and financial statements respectively. This plan involves a balanced approach to share repurchases to increase shareholder value, dividend payments to shareholders, and business reinvestment for growth prospects.

	'''c) Strategic Investments'''		'''c) Strategic Investments'''

	Significant investments in research and development, strategic acquisitions, and cloud infrastructure have been the bedrock of Microsoft's technological advancements and market expansion. Embracing emerging technologies, such as artificial intelligence, augmented reality, and quantum computing, has positioned Microsoft as a trailblazer at the forefront of innovation and digital transformation.		Significant investments in research and development, strategic acquisitions, and cloud infrastructure have been the bedrock of Microsoft's technological advancements and market expansion. Embracing emerging technologies, such as artificial intelligence, augmented reality, and quantum computing, has positioned Microsoft as a trailblazer at the forefront of innovation and digital transformation.

			The first aspect should be the acquisition. With the goal to expand the range of its offer of products and services, Microsoft implemented a strategic acquisition strategy. The makers of Minecraft, Mojang, LinkedIn, GitHub, and Bethesda Softworks' parent company ZeniMax Media are among the notable acquisitions. Through these acquisitions, Microsoft became able to broaden its user base, access new markets, and gain new technologies.

			Furthermore, for the future deep development and business line exploration. Microsoft has made substantial investments in the domains of cloud computing and artificial intelligence (AI). The international collection of data centers supporting Azure, Microsoft's cloud computing platform, has experienced significant capital expenditures. Additionally, Microsoft's efforts to conduct research and development in AI have allowed the integration of AI capabilities into a number of other goods and services.

	'''d) Financial Review'''		'''d) Financial Review'''

>Deepakm02: citations in valuation

2023-07-27T12:55:13Z

citations in valuation

← Older revision		Revision as of 13:55, 27 July 2023
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	\|-		\|-
	\|Which Financial forecasts were used?		\|Which Financial forecasts were used?
	\|Avg. estimates taken from Yahoo Finance		\|Avg. estimates taken from Yahoo Finance<ref>https://uk.finance.yahoo.com/quote/MSFT?p=MSFT</ref>
	\|We have used experts forecasts to predict revenue over the next two years.		\|We have used experts forecasts to predict revenue over the next two years and then used forecasting methods to predict values up to 5 years into the future.
	\|-		\|-
	\| colspan="3" \|		\| colspan="3" \|
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	\|Current Market Capitalisation		\|Current Market Capitalisation
	\|2.593T		\|2.593T
	\|As at 27th July 2023, the current value of Microsoft Corporation is £2.593 Trillion.		\|As at 27th July 2023, the current value of Microsoft Corporation is £2.593 Trillion<ref>https://uk.finance.yahoo.com/quote/MSFT?p=MSFT</ref>.
	\|-		\|-
	\|Which time period do you want to use to estimate the expected return?		\|Which time period do you want to use to estimate the expected return?
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	\|Perpetual Growth Rate used(%)		\|Perpetual Growth Rate used(%)
	\|2.5%		\|2.5%
	\|The OECD suggests that the global economy is expected to grow by approximately 2.7% in 2023, and so it doesn't make much sense to use a value larger than this. Therefore, to be conservative the StockHub user suggests a value of 2.5%.		\|The OECD suggests that the global economy is expected to grow by approximately 2.7% in 2023<ref>https://www.oecd.org/newsroom/global-economic-outlook-improving-albeit-to-a-low-growth-recovery.htm</ref>, and so it doesn't make much sense to use a value larger than this. Therefore, to be conservative the StockHub user suggests a value of 2.5%.
	\|}		\|}

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	# The Discount Rate - we have used a default value of 8%		# The Discount Rate - we have used a default value of 8%
	# The Perpetual Growth Rate - we have used a default value of 2.5%		# The Perpetual Growth Rate - we have used a default value of 2.5%

	Below we have detailed the effects of a 50% change to both the discount rate an the perpetual growth rate, an investor should consider values which are most suitable to them.		Below we have detailed the effects of a 50% change to both the discount rate an the perpetual growth rate, an investor should consider values which are most suitable to them.

86.20.163.149: sensitivity analysis

2023-07-27T12:49:19Z

sensitivity analysis

← Older revision		Revision as of 13:49, 27 July 2023
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	# The Discount Rate - we have used a default value of 8%		# The Discount Rate - we have used a default value of 8%
	# The Perpetual Growth Rate - we have used a default value of 2.5%		# The Perpetual Growth Rate - we have used a default value of 2.5%


	Below we have detailed the effects of a 50% change to both the discount rate an the perpetual growth rate, an investor should consider values which are most suitable to them.		Below we have detailed the effects of a 50% change to both the discount rate an the perpetual growth rate, an investor should consider values which are most suitable to them.
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	\|+		\|+
	\|}		\|}

			==== Sensitivity Analysis applied to Microsoft Stock ====
	{\| class="wikitable"		{\| class="wikitable"
	!Main input		!Main input