Can Microsoft Continue to Outperform?

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With shares of Microsoft (NASDAQ:MSFT) trading around $37, is MSFT an OUTPERFORM, WAIT AND SEE, or STAY AWAY? Let’s analyze the stock with the relevant sections of our CHEAT SHEET investing framework:

T = Trends for a Stock’s Movement

Microsoft is engaged in developing, licensing, and supporting a wide range of software products and services. The company also designs and sells hardware and delivers online advertising to customers. It operates in five segments: Windows and Windows Live, Server and Tools, Online Services Division, Microsoft Business Division, and Entertainment and Devices. As a mature company, Microsoft is also offering a stable dividend, which is currently yielding around 3.32 percent annually.

Microsoft has released the latest sales numbers for the new Xbox One video game console, saying that it took 18 days for the device to sell more than 2 million units. The latest data again place the Xbox One neck and neck with Sony’s (NYSE:SNE) competing PlayStation 4. Last week, Sony released its sales figures for the new PlayStation, and as of December 1, the company had sold 2.1 million consoles. “We continue to be humbled and overwhelmed by the positive response from our fans. We are thrilled to see sales of Xbox One on a record-setting pace, with over 2 million Xbox One consoles in homes around the world. Demand is exceeding supply in our 13 launch markets and Xbox One is sold out at most retailers,” said Yusuf Mehdi, Xbox’s corporate vice president of strategy and marketing, in the company’s announcement.

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