Microsoft (MSFT) Stock Lookout
Microsoft Corp. (NASDAQ:MSFT) new operating system is just three days away from making its debut, but the American multinational technology company based in Redmond, Washington is still dealing with the effects from the acquisition of Nokia Corporation (NYSE:NOK) not too long ago.
Even with the release just three days away, Microsoft still has a lot to talk about, especially in terms of security. In an interview with InformationWeek, Chris Hallum, a senior product manager for Windows business security, talked about the new technology that the company is using for data protection. The new operating system will move the local security authority (LSA) into a separate container in a virtual environment. If a hacker cracks the operating system, then the authentication process remains secure.
Out of 42 analysts who cover the stock, 21 have a Buy rating, 14 rate the stock a Hold, while seven think it is a Sell. The consensus 12-month price target on the stock is $50.07, which indicates 8.75% upside potential over the current price.
The MSFT Q4 earnings tell us the focus on cloud and mobile is already starting to pay off. And that is exactly what investors need to watch, not the fate of the company’s ageing cash cows.
Instead of selling customers the product once every few years, Microsoft is now selling subscriptions – and earning a steady revenue stream.
Enterprise cloud revenue, which includes Office 365 as well as other services, such as Azure, was up 88% in the quarter. And the annual run rate increased from $6.3 billion last quarter to $8 billion – all signs that Microsoft’s cloud strategy is rapidly gaining traction.
And Office 365 is the product most responsible for Microsoft’s $24.5 billion in “off-balance sheet revenue.” That figure represents long-term contracts with businesses – a guarantee of revenue over an extended period.
The Microsoft Q4 earnings were decreased by a one-time write-off related to the purchase of Nokia’s devices unit. But what looked like a loss otherwise was a beat. And all the evidence shows that Microsoft’s focus on cloud and mobile is slowly getting the company in a new market strategy and the forthcoming release of the new operating system is part of the logical framework brought by the CEO Satya Nadella, which took over as Microsoft’s CEO on February 2014..