What To Expect From Microsoft Today

Microsoft
MSFT
Inc. is scheduled to report earnings after today’s close. The stock hit a record high of $349.67/share in 2021 and is currently trading near $242/share. The stock is prone to big moves after reporting earnings and can easily gap up if the numbers are strong. Conversely, if the numbers disappoint, the stock can easily gap down. To help you prepare, here is what the Street is expecting:

Gallery: Microsoft’s Biggest Hits And Flops

12 images

Earnings Preview:

The company is expected to report a gain of $2.27/share on $53.48 billion in revenue. Meanwhile, the so-called Whisper number is a gain of $2.25/share. The Whisper number is the Street’s unofficial view on earnings.

A Closer Look At The Fundamentals:

It is encouraging to see that the company managed to grow its earnings steadily in each of the past four quarters on a year-over-year basis. It is also encouraging to see revenue grow in each of the past four quarters. Separately, the Return on Equity has been very high, nearly 50% in each of the past four quarters which is a very encouraging sign. The company also made a big investment in OpenAI, the parent of ChatGPT, and that could be a major game changer going forward to its bottom line.

A Closer Look At The Technicals:

Technically, the stock has been under a lot of pressure over the past year and it is down over 20% from the bear market high in 2021. The stock is trying to bottom but it is still trading below its 200 day moving average line. The bulls want to see the stock rally after reporting earnings and the bears want to see it gap down.

Pay Attention To How The Stock Reacts To The News:

From where I sit, the most important trait I look for during earnings season is how the market and a specific company reacts to the news. Remember, always keep your losses small and never argue with the tape.

Disclosure, the stock has been previously featured in my FindLeadingStocks.com newsletter.

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