Microsoft Q2 FY2024 Review: A Case Of Good Not Being Good Enough

Summary:

  • Powered by an acceleration in Azure to 30% y/y growth, Microsoft delivered a solid double beat for Q2 FY2024.
  • However, the stock failed to move higher in light of this report, with Microsoft priced for perfection and more at ~38x forward P/E.
  • According to TQI’s Valuation Model, Microsoft is running well ahead of its fair value estimate. MSFT’s 5-year expected CAGR of ~4% is comparable to risk-free treasuries.
  • Should you buy MSFT stock in light of its solid Q2 FY2024 earnings report? Read on to find out.

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David Becker

Brief Review of Microsoft’s Q2 FY2024 Report

In Q2 FY2024, Microsoft Corporation (NASDAQ:MSFT) reported total revenues of $62B (+18% y/y, vs. est. $60.97B) and diluted EPS of $2.93 (+26% y/y, vs. est. $2.61) to sail past consensus estimates. However, this strong double beat from Microsoft failed to inspire an upward

Q2 FY2024 Guidance Q3 FY2023 Actual Revenue Result
Productivity & Business Processes $18.8B to $19.1B


Analyst’s Disclosure: I/we have a beneficial long position in the shares of META, GOOGL, AMZN either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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