Microsoft shares have grown more than 120 percent over the last two years. The market of the group is highly diversified.
Three categories can be distinguished for the company with the Productivity & Business Processes segment contributed 35% to the overall sales, like Linkedin, Workplace, etc. For having Azure, SQL Server, Github, etc, the share of the Intelligent Cloud segment was also 35 percent, while Windows, gaming, and others included in the Personal Computing segment contributed 30 percent to the overall sales of the business. They are Office, Server, and Windows if we talk about the most successful Microsoft goods. Most of the programs are available by subscription to consumers, so that cash receipts to the balance happen daily and without any seasonal variations. Furthermore, management has continued to attain strong performance indicators: the non-GAAP EBIT margin has improved from 30.5 percent to 37.1 percent over the last 4 years.
After 2017, Microsoft’s income has continued to rise exponentially, largely driven by a cut in the US tax rate. EPS has grown last year by around 20 percent over the last four years. The key growth factors are servers and office goods. According to the management, because of strong systemic changes in the sector, through which a growing demand for digitalization emerged, the company is aggressively evolving. Over the next decade, Microsoft’s CEO expects infrastructure investment to double. Digitalization is leading to the active development in data storage demand, data collection, increased cybersecurity costs and other technology resources.
Microsoft is one of the most promising technology firms and, even with the sharp rise in stocks in recent years, it needs investor interest. But currently, the medium-term margin is 13% to achieve the average target price of $241.