Microsoft (NASDAQ:MSFT) Stock Price Down 1.2% - What's Next?

On Tuesday, shares of Microsoft Corporation (NASDAQ:MSFT) fell by 1.2%, reaching a low of $397.69 before settling at $399.23. During the day’s trading, approximately 8,128,913 shares changed hands, which is a significant drop of 63% compared to the average volume of 22,204,635 shares. The previous day’s closing price was recorded at $404.00.

Wall Street Analyst Insights

Microsoft has garnered attention from various research analysts. Recently, DA Davidson reaffirmed a "neutral" rating with a price target of $425.00. Similarly, UBS Group revised its price target down from $525.00 to $510.00 while maintaining a "buy" rating. TD Cowen adjusted their target from $495.00 to $475.00 but also retains a "buy" stance. Morgan Stanley lowered its price target from $540.00 to $530.00 and kept an "overweight" rating. Lastly, the Royal Bank of Canada reaffirmed an "outperform" rating with a target price of $500.00. Currently, the stock holds three "hold" ratings and twenty-seven "buy" ratings from analysts. Collectively, Microsoft has a consensus rating of "Moderate Buy" with an average target price of $510.96.

Analyzing Microsoft's Price Performance

The company’s quick ratio stands at 1.34, alongside a current ratio of 1.35, while it maintains a low debt-to-equity ratio of 0.13. The stock's fifty-day moving average is noted at $424.25, with a 200-day average at $423.08. It currently holds a market capitalization of $2.97 trillion, a price-to-earnings ratio of 32.21, and a beta of 0.90.

In its latest earnings report published on January 29th, Microsoft announced earnings per share (EPS) of $3.23 for the quarter, surpassing the analysts' expectation of $3.15 by $0.08. The company's net margin stands at 35.43% with a return on equity of 33.36%. Comparatively, last year's EPS for the same quarter was $2.93. Analysts predict that Microsoft will report an EPS of 13.08 for the current fiscal year.

Dividend Declaration

Microsoft has also declared its quarterly dividend, which is scheduled for payment on March 13th. Shareholders recorded before February 20th will receive a dividend of $0.83, leading to an annualized dividend of $3.32 and a yield of 0.83%. The current dividend payout ratio is 26.73%.

Insider Trading Activity

In related developments, Microsoft’s Chief Marketing Officer, Takeshi Numoto, sold 2,500 shares on December 9th at an average price of $447.41, totaling roughly $1,118,525. Following this transaction, Numoto retains 49,352 shares valued at around $22,080,578.32. This reflects a 4.82% decrease in ownership. Over the last quarter, insiders have sold an aggregate of 8,000 shares valued at approximately $3,493,820. Insiders hold about 0.03% of the total shares.

Institutional Investor Activity

Recently, several institutional investors have shifted their holdings in Microsoft. In the 4th quarter, Ball & Co Wealth Management Inc. purchased a new stake worth $31,000. Fiduciary Advisors Inc. acquired a position worth $38,000. Christopher J. Hasenberg Inc. increased its holdings by 35.7% in the third quarter and now holds 95 shares valued at $39,000. IFS Advisors LLC raised its holdings by 53.8% and now owns 100 shares valued at $42,000. Finally, LSV Asset Management took on a new position worth about $44,000 within the same timeframe. Currently, institutional and hedge fund investors own approximately 71.13% of Microsoft’s stock.

Understanding Microsoft’s Business

Microsoft Corporation is a global leader in developing and supporting software, services, devices, and solutions. The company’s Productivity and Business Processes segment includes products such as Office, Exchange, SharePoint, Microsoft Teams, and Microsoft 365, as well as consumer services like Microsoft 365 subscriptions and other office services.

Conclusion

The recent drop in Microsoft’s stock price raises questions for investors about the right move going forward. With a blend of positive earnings results and strategic analyst ratings, investors may want to assess their positions carefully.

Microsoft, Stocks, Investing