What's Next: Microsoft's Earnings Preview

Microsoft MSFT is preparing to release its quarterly earnings on Wednesday, 2025-04-30. Here's a brief overview of what investors should keep in mind before the announcement.

Analysts expect Microsoft to report an earnings per share (EPS) of $3.22.

Investors in Microsoft are eagerly awaiting the company's announcement, hoping for news of surpassing estimates and positive guidance for the next quarter.

It's worth noting for new investors that stock prices can be heavily influenced by future projections rather than just past performance.

Performance in Previous Earnings

In the previous earnings release, the company beat EPS by $0.13, leading to a 6.18% drop in the share price the following trading session.

Here's a look at Microsoft's past performance and the resulting price change:

Stock Performance

Shares of Microsoft were trading at $391.16 as of April 28. Over the last 52-week period, shares are down 0.58%. Given that these returns are generally negative, long-term shareholders are likely unhappy going into this earnings release.

Analyst Opinions on Microsoft

For investors, staying informed about market sentiments and expectations in the industry is paramount. This analysis provides an exploration of the latest insights on Microsoft.

Analysts have provided Microsoft with 21 ratings, resulting in a consensus rating of Outperform. The average one-year price target stands at $486.14, suggesting a potential 24.28% upside.

Comparing Ratings with Competitors

In this comparison, we explore the analyst ratings and average 1-year price targets of Oracle, ServiceNow and Palo Alto Networks, three prominent industry players, offering insights into their relative performance expectations and market positioning.

• Analysts currently favor an Neutral trajectory for Oracle, with an average 1-year price target of $177.13, suggesting a potential 54.72% downside.
• Analysts currently favor an Outperform trajectory for ServiceNow, with an average 1-year price target of $1074.27, suggesting a potential 174.64% upside.
• Analysts currently favor an Outperform trajectory for Palo Alto Networks, with an average 1-year price target of $214.26, suggesting a potential 45.22% downside.

Overview of Peer Analysis

The peer analysis summary offers a detailed examination of key metrics for Oracle, ServiceNow and Palo Alto Networks, providing valuable insights into their respective standings within the industry and their market positions and comparative performance.

Key Takeaway:

Microsoft ranks at the top for Gross Profit and Return on Equity among its peers. It ranks in the middle for Revenue Growth.

Delving into Microsoft's Background

Microsoft develops and licenses consumer and enterprise software. It is known for its Windows operating systems and Office productivity suite. The company is organized into three equally sized broad segments: productivity and business processes (legacy Microsoft Office, cloud-based Office 365, Exchange, SharePoint, Skype, LinkedIn, Dynamics), intelligence cloud (infrastructure- and platform-as-a-service offerings Azure, Windows Server OS, SQL Server), and more personal computing (Windows Client, Xbox, Bing search, display advertising, and Surface laptops, tablets, and desktops).

Microsoft: A Financial Overview

Market Capitalization: Positioned above industry average, the company's market capitalization underscores its superiority in size, indicative of a strong market presence.

Revenue Growth: Over the 3 months period, Microsoft showcased positive performance, achieving a revenue growth rate of 12.27% as of 31 December, 2024. This reflects a substantial increase in the company's top-line earnings. In comparison to its industry peers, the company trails behind with a growth rate lower than the average among peers in the Information Technology sector.

Net Margin: Microsoft's net margin is impressive, surpassing industry averages. With a net margin of 34.62%, the company demonstrates strong profitability and effective cost management.

Return on Equity (ROE): Microsoft's financial strength is reflected in its exceptional ROE, which exceeds industry averages. With a remarkable ROE of 8.17%, the company showcases efficient use of equity capital and strong financial health.

Return on Assets (ROA): Microsoft's ROA stands out, surpassing industry averages. With an impressive ROA of 4.56%, the company demonstrates effective utilization of assets and strong financial performance.

Debt Management: The company maintains a balanced debt approach with a debt-to-equity ratio below industry norms, standing at 0.21.

To track all earnings releases for Microsoft visit their earnings calendar on our site.

This article was generated by Benzinga's automated content engine and reviewed by an editor.