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We Still See Upside in Microsoft Shares Today

We Still See Upside in Microsoft Shares Today

Microsoft closed fiscal 2017 with a bang, delivering top- and bottom-line results that easily outpaced our expectations.

We are beginning to see Microsoft's cloud business drag consolidated top-line results along with it. Although Commercial Cloud margins remain a drag on profitability, they continue to accelerate upon an upward trajectory.

We are maintaining our wide moat rating for the firm, and after incorporating management's initial guidance for fiscal 2018, we will also maintain our $83 fair value estimate. We continue to see moderate upside in Microsoft today.

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About the Author

Rodney Nelson

Senior Equity Analyst

Rodney Nelson is a senior equity analyst for Morningstar Research Services LLC, a wholly owned subsidiary of Morningstar, Inc. His coverage spans enterprise software, including legacy software companies, software-as-a-service providers, and business intelligence software vendors.

Before assuming his current role in 2015, Nelson was an associate equity analyst on the technology, media, and telecommunications team, covering software, Internet, and Canadian telecom companies. He was also a member of the cross-sector equity research team from 2012 to mid-2014. He joined Morningstar in 2011 as an equity and credit research sales intern before becoming a full-time employee in 2012.

Nelson holds a bachelor’s degree in economics from the University of Chicago.

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