Hellow guys, Welcome to my website, and you are watching Microsoft Intrinsic Value Calculation After Inside Information - MSFT stock Fundamental Analysis. and this vIdeo is uploaded by Sloth Investor at 2023-06-29T13:23:13-07:00. We are pramote this video only for entertainment and educational perpose only. So, I hop you like our website.
| Name | Microsoft Intrinsic Value Calculation After Inside Information - MSFT stock Fundamental Analysis |
| Video Uploader | Video From Sloth Investor |
| Upload Date | This Video Uploaded At 29-06-2023 20:23:13 |
| Video Discription | Microsoft stock analysis | MSFT stock | 2030 valuation | #msftstock #microsoftstock Try Simply Wall St Unlimited account to be able to easily research companies using this link https://simplywall.st/plans?via=sloth and get 40% off, you have a 14 day trial period so make sure to test it out, you have nothing to lose and everything to gain. Use TradingView for getting 20 years of companies financial data, I have their Pro plan. If you use this link https://www.tradingview.com/gopro/?share_your_love=lvloh3n you and me would get 15$ when you subscribe to their service. Timecodes 0:00 - Intro 0:20 - Microsoft Old Revenue 0:55 - How To Calculate Intrinsic Value? 1:35 - Where To Get The Information? 2:35 - Microsoft Revenue by 2030 2:45 - Microsoft Free Cash Flow by 2030 2:58 - FCF Multiple for Microsoft Valuation 3:10 - Microsoft Valuation by 2030 3:22 - Microsoft Share Outstanding by 2030 3:41 - Microsoft Share Price by 2030 3:54 - Microsoft Intrinsic Value by 2030 4:22 - Sum up A couple of days ago a court filling came out (https://www.cnbc.com/2023/06/26/microsoft-ceo-nadella-said-revenue-would-reach-500-billion-by-2030.html) that showed Satya Nadella, the CEO of Microsoft, set a goal of $500 billion in revenue for his company by 2030. He knows Microsoft inside and out and this was supposed to be an internal document, so probably he knows something that we don’t. Their revenue for year 2022 was $198 billion, that makes it a 12% top line growth, which is in line with their growth history. I decided to use this new information and calculate what would the price for Microsoft stock be by 2030, and what is their intrinsic value today. We will do two valuations, one a little bit undervalued and one a little bit overvalued. Hype around Microsoft is usually high so it is totally possible that the overvalued calculation happens. Their revenue for year 2022 was $198,27 billion, we look at their June quarter because that’s how their fiscal year is scheduled. And if you are wondering about the tool I am using, this is Simply Wall St, it a great product that I use daily. You get access to more than 50,000 company information, valuation and news, past performance and future growth estimations, financial health and dividend data, management compensation and insider transactions, ownership structure and much more. You can create and follow the performance of your portfolio by adding your buy and sell history, create different watch list and read the news for them and different markets. They have 3 different plans, I am using the unlimited one to get access to everything which costs $20 per month, but if you use this link https://simplywall.st/plans?via=sloth you get 40% discount and two weeks of free trial. So with a low price of $12 per month you can easily do all the research you need. I think this is a must have tool for every value investor. Now let’s get back to what we were doing. If we grow their revenue by 12,27% every year until 2030 we will reach their internal goal of $500 billion. They have a 33% free cash flow margin, so we add that to our calculation too. In 2022 they had $65 billion of FCF and by 2030 they will have $165 billion. We will go with 20 multiple for the little bit undervalued example, and 30 for the little bit overvalued example. If we expand that Microsoft will have a valuation of 3,3 to $5 Trillion by 2030. Right now they have 7,54 billion share outstanding. For simplicity let’s imagine they won’t pay any dividends and use all the free cash flow to buy back their shares, which mathematically would be the same thing if you reinvest all your dividends into Microsoft stocks. For our two valuations they will have 5 to 5,75 billion shares outstanding by 2030. So their share price which is dividing their valuation by the number of shares outstanding is gonna be 660 to $860 by 2030. But a dollar tomorrow is not worth a dollar today, we need to discount it into today’s dollar. We know we want to get a 15% return each year, so we use 15% as the discount rate for our calculation of intrinsic value. We divide the share price by 15% to the power of number of years passed. Which will give us 215 to $280 as the range of intrinsic value for Microsoft stock today if our assumptions were true. With today’s price of $335 it seems a little bit over priced. Thank you for watching this video, remember to try Simply Wall St unlimited account using this link https://simplywall.st/plans?via=sloth, you have a 14 day trial period so make sure to test it out, you have nothing to lose and everything to gain. Please like the video for the YouTube algorithm, subscribe to the channel and hit the bell button to get notification and never miss any of my videos, it will help the channel a lot. Have a great rest of the day and see you on the next one. DISCLAIMER: This description contains affiliate links, which means that if you buy something using one of the product links, I’ll receive a small commission. |
| Category | Education |
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