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Microsoft Corp. (MSFT), an undervalued stock with strong business predictability (closing price $25.25). Part 2

In Quick Pitch on August 29, 2011 at 12:14 am

Continued from Part 1 Microsoft Corp. (MSFT), an undervalued stock with strong business predictability (closing price $25.25). Part 1

Forward looking earnings guidance provided by management for FY12

i) Its largest revenue and operating profit segment, Microsoft Business Division transactional revenue likely lag overall PC market. However, multi-year licensing revenue should grow low double digits.

ii) Its second largest revenue and operating profit segment, Windows and Windows Live transactional revenue in emerging market growth significantly outpacing developed market growth. Business PC growth to outpace consumer PC growth, as business refresh continues. We opined that many of the business and personal usage of Windows XP will likely to fully convert to Windows 7 due to the old cycle attrition.

iii) Its third largest revenue and operating profit segment, Server and Tools transactional revenue to track with the hardware market. Multiyear licensing revenue and enterprise services revenue to grow low double digits.

Read more here Microsoft Corp. (MSFT), an undervalued stock with strong business predictability (closing price $25.25). Part 2

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