Microsoft investors should know this!

What do analysts advise for Microsoft?

Microsoft received a total of 33 analyst ratings in the past twelve months.The average rating for the stock is “Buy” and is made up of 30 “Buy”, 3 “Hold” and 0 “Sell” opinions. In a second view, the analysts’ ratings for the past month are also interesting. Here, the following picture emerged1 Buy, 1 Hold, 0 Sell. Thus, the latest analyses lead to an overall rating of “Buy”. Based on the average of the price forecast of (303.42 USD for the security, this results in an upside potential of 22.6 percent (starting from the last closing price, 247.49 USD), if one follows the opinion of the analysts. This therefore represents a “buy” recommendation. Microsoft thus receives a “Buy” rating for this section in total.

Current data from the RSI for Microsoft

A prominent signal of technical analysis, the Relative Strength Index, RSI, relates the upward and downward movements of prices in a period of – exemplary – 7 days. At a value between 0 and 30, a value is considered “oversold”, at 70 to 100 as “overbought” and in between as neutral. The RSI of Microsoft leads at a level of 11.67 to the rating “Buy”. The RSI25, based on a 25-day period, at 45.42 is indicative of a “hold” rating at this level. This puts the overall rating at “Buy”.

Does Microsoft’s P/E ratio suggest a buy?

The most important indicator for fundamental analysis is the price-earnings ratio (P/E). On the basis of this, Microsoft, with a value of 26.58, is significantly cheaper than the average in the “software” sector and therefore undervalued. The industry P/E ratio is 141.71, which represents a gap of 81 percent. Therefore, we classify the title as a “Buy” recommendation.

How do shareholders assess the situation?

Strong positive or negative swings in Internet communications can be detected precisely and early with our analysis. However, the mood has hardly changed for Microsoft in recent weeks. The stock gets a “hold” rating from us for this. Discussion strength measures the attention of market participants in social media. For Microsoft, our programs have measured reduced activity over the past four weeks. This indicates that market participants are becoming less interested in this stock. Microsoft gets a “sell” rating for this. Overall, the stock is therefore rated a “Sell” at this level.

What price signals does the chart send?

From the last 200 trading days, an average of $266.41 is calculated for the closing price of Microsoft stock. The closing price on the last trading day was USD 247.49 (-7.1 percent difference) and we therefore assign a “Sell” rating from a chart perspective. In addition to the 200-day average, the 50-day average is also often analyzed as part of the chart technique. This is currently $237.17, so the last closing price is at a similar level (+4.35 percent). This means that on this shorter-term analysis basis, a different rating for Microsoft emerges, and the stock receives a “hold” rating. Microsoft thus receives an overall “hold” rating for the simple chart technique.

Current shareholder sentiment

Social media sentiment has been mostly negative in recent days. On four days, the discussion was dominated by positive topics, while negative communication prevailed on five days. In the past one or two days, investors did not talk about either positive or negative topics relating to Microsoft. As a result, the editorial team rates the stock a “Sell”. Statistical evaluations based on large historical data sets have revealed an overhang of buy signals over the past two weeks. Specifically, there were 6 “Buy” signals (with 1 “Sell” signal) based on communications, resulting in a “Buy” rating for this criterion. In summary, this results in a “Hold” rating for investor sentiment.

Share loses to peers

Microsoft posted a -21.6 percent performance over the past 12 months. Similar stocks in the “software” sector have risen an average of 84.3 percent, meaning Microsoft has underperformed the industry by -105.9 percent. The “information technology” sector had a median return of 57.48 percent over the past year. Microsoft was 79.08 percent below that average. The underperformance in both industry and sector comparisons results in a “sell” rating in this category.