Subject: Re: Earnings & Valuation
MSFT reported EPS of $4.27 / share, and Revenue of $82.89B yesterday , a very solid quarter and a good indication their business is performing well, with revenue growth now at 18% up from the 12%-15% from a few years ago.

A little valuation check in


REV : $82.89 +18% 
EPS : $4.27  +23% 

TTM
REV : $318.27
EPS : $16.19		

Valuation
PE  : 25x
PS  : 9.5x

Price Target (12-18 months)
* We might expect TTM EPS to be $19.50 per share and Revenue to be $370B

PE Approach
* Range (25x-35x)
* Stock Price : $487 - $682 (mid point : $580)

PS Approach
* Range (8x-13x)
* Stock Price : $400 - $645 (mid point : $522)

Mid Point of both approaches would be $550 / share

The stock is trading at $400, which I think is good value, with 35% upside in the next 12 months, and negligible downside (maybe $350/share?).

tecmo
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