Microsoft Corp (MSFT)

Price: $31.98

Industry: Computer Software-Services

Chaikin Power Gauge Report | Generated: Mon Mar 26 12:22 EDT 2012 Power Gauge Rating

MSFT - Bullish
The Chaikin Power Gauge Rating earnings performance.
TM

for MSFT is bullish due to very strong

MSFT's earnings performance is very strong as a result of a relatively low projected P/E ratio. An appraisal of MSFT's financial metrics show a high return on equity.

News Sentiment Rating

Bearish
MSFT Microsoft Co.. March 26, 2012

Chaikin Sentiment Gauge for MSFT is bearish. There is currently a significant negative sentiment within news stories concerning MSFT.

TM

News Sentiment :Negative

Power Trend - 5 Year Chart

The Power Gauge distills a 20 factor model into a concise picture of a stock's potential.

High Potential

Neutral

Low Potential

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Financials & Earnings

Financial Metrics

Financial Metrics Rating

LT Debt/Equity Ratio

Neutral
MSFT's financial metrics are neutral. The company yields a high return on shareholder's equity and may be overvalued. The rank is based on a high long term debt to equity ratio relative to its industry group, high price to book value ratio, high return on equity and relatively high cash flow.

Price to Book Value

Return on Equity

Price to Sales Ratio

Business Value

Assets and Liabilities

Ratio Current Ratio LT Debt/Equity TTM 2.86 0.21

Valuation
Ratio Price/Book Price/Sales TTM 4.20 3.84

Returns
Ratio Return on Invest Return on Equity TTM 32.7% 39.4%

Earnings Performance

Earnings Performance Rating

Earnings Growth

Very Bullish
MSFT's earnings performance has been very strong. The company is priced relatively low compared to next year's projected EPS and has a history of strong earnings growth. The rank is based on high earnings growth over the past 3-5 years, a relatively low projected P/E ratio and consistent earnings over the past 5 years.

Earnings Surprise

Earnings Trend

Projected P/E Ratio

Earnings Consistency

5 Year Revenue and Earnings Growth

06/07 Revenue(M) Rev % Growth EPS EPS % Growth 51,122.00 15.45% $1.44 19.01% 06/08 60,420.00 18.19% $1.90 31.94% 06/09 58,437.00 -3.28% $1.63 -14.21% 06/10 62,484.00 6.93% $2.13 30.67% 06/11 69,943.00 11.94% $2.73 28.17%

EPS Estimates
Factor Quarterly EPS Yearly EPS Factor 3-5 year EPS Actual EPS Prev $0.62 $2.73 Actual EPS Growth 9.84% EST EPS Current $0.57 $2.69 Est EPS Growth 8.83% Change -0.05 -0.04 Change -1.01

EPS Surprise
Estimate Latest Qtr 1 Qtr Ago 2 Qtr Ago 3 Qtr Ago $0.76 $0.68 $0.58 $0.56 Actual $0.78 $0.68 $0.69 $0.56 Difference $0.02 $0.00 $0.11 $0.00 % Difference 2.63 0.00 18.97 0.00

EPS Quarterly Results

FY 06/10 06/11 06/12 Qtr 1 $0.40 $0.63 $0.68 Qtr 2 $0.75 $0.78 $0.79 Qtr 3 $0.46 $0.62 Qtr 4 $0.52 $0.70 Total $2.13 $2.73 -

Fiscal Year End Month is June.

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Price Trend & Expert Opinions

Price/Volume Activity

Price/Volume Activity Rating

Relative Strength vs Market

Neutral
Price and volume activity for MSFT is neutral. MSFT is experiencing sustained buying and is in a decelerating price trend compared to 4 months ago. The rank for MSFT is based on positive Chaikin money flow, a positive Chaikin price trend, a negative Chaikin price trend ROC and a decreasing volume trend.

Chaikin Money Flow

Price Trend

Price Trend ROC

Volume Trend

Relative Strength vs S&P500 Index

Chaikin Money Flow

Chart shows whether MSFT is performing better or worse than the market.

Chaikin Money Flow analyzes supply and demand for a company's stock.

Price Activity
Factor 52 Week High 52 Week Low % Change YTD Rel S&P 500 Value 32.85 23.70 12.47%

Price Activity
Factor % Change Price - 4 Weeks % Change Price - 24 Weeks % Change Price - 4 Wks Rel to S&P % Change Price - 24 Wks Rel to S&P Value 2.04% 21.53% -0.42% 1.33%

Volume Activity
Factor Average Volume 20 Days Average Volume 90 Days Chaikin Money Flow Persistency Value 44,898,756 52,343,150 73%

Expert Opinions

Expert Opinions

Earnings Estimate Revisions

Neutral
Expert opinions about MSFT are neutral. Shorting of MSFT is low and insiders are not net buyers of MSFT's stock. The rank for MSFT is based on a low short interest ratio, insiders not purchasing significant amounts of stock, optimistic analyst opinions and price strength of the stock versus the Computer Software-Services industry group.

Short Interest

Insider Activity

Analyst Opinions

Relative Strength vs Industry

Earnings Estimate Revisions

Current Current Qtr Next Qtr 0.57 0.65 Current Current FY 2.69 7 Days Ago % Change 0.58 0.65 -1.72% 0.00%

Analyst Recommendations
Factor Mean this Week Mean Last Week Change Mean 5 Weeks Ago Value Buy Buy 0.00 Buy

EPS Estimates Revision Summary

Last Week Up Curr Qtr Curr Yr Next Qtr 0 1 1 3 Down 2 1 1 0 Last 4 Weeks Up 2 3 1 3 Down 2 1 2 1

30 Days Ago % Change 2.68 0.01

Next Yr

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The Company & Its Competitors

MSFT's Competitors in Computer Software-Services

Company MSFT CA SYMC SAP VMW ADBE INTU ORCL Power Gauge Historic EPS growth 9.84% 3.31% 8.78% 10.04% 30.62% 11.64% 10.53% 20.32% Projected EPS growth 8.83% 9.50% 9.00% 12.30% 23.67% 10.00% 14.83% 14.00% Profit Margin 32.57% 19.52% 11.34% 23.94% 19.22% 19.75% 16.90% 25.49% PEG 1.35 1.35 1.38 1.41 2.47 1.70 1.50 0.89 PE 11.81 13.09 13.38 18.00 70.68 19.00 24.56 12.47 Revenue(M) 69,943 4,429 6,190 18,506 3,767 4,216 3,851 35,622

News Headlines for MSFT OpenTable shares rise after analyst upgrade Mar 21, 2012 Apple to pay dividend, start stock buybacks Mar 19, 2012 K12 Enterprise Acquires Virginia Based Software Firm - Mar 8, 2012 TRUSTe Unveils New EU Privacy Solution - Mar 7, 2012 Developments related to Google privacy initiative - Mar 1, 2012

Company Details Microsoft Corp ONE MICROSOFT WAY REDMOND, WA 98052-6399 USA Phone: 425-882-8080 Fax: 425-936-7329 Website: http://http://www.microsoft.com Full Time Employees: 90,000 Sector: Computer and Technology

Company Profile Microsoft develops, manufactures, licenses, and supports a wide range of software products for a multitude of computing devices. Microsoft software includes scalable operating systems for servers, personal computers, and intelligent devices; server applications for client/server environments; knowledge worker productivity applications; and software development tools. The Company's online efforts include the MSN network of Internet products and services and alliances with companies involved with broadband access and various forms of digital interactivity.

Power Gauge Ratings are created using a relative ranking system that assigns a rank of 0 to 100 (100 being the highest) to each stock in the universe. Rank is calculated by evaluating each of the stocks factors and combining them into a single number using a weighting formula. A stock's rank ranges from 100-0, where 100 is the strongest, and a rank of 95 indicates the stock is better than 95% of the stocks in the universe. Chaikin Stock Research(CSR) is not registered as a securities broker dealer or investment advisor with either the U.S. Securities and Exchange Commission or with any state securities regulatory authority. CSR is not responsible for trades executed by users of this research report, our web site or mobile app based on the information included herein. The information presented in this report does not represent a recommendation to buy or sell stocks or any financial instrument nor is it intended as an endorsement of any security or investment. The information in this report is generic by nature and is not personalized to the specific financial situation of any individual. The user bears complete responsibility for their own investment research and should seek the advice of a qualified investment professional before making any investment decisions. Copyright (c) 1978-(Present) by ZACKS Investment Research, Inc ("ZACKS"). The information, data, analyses and opinions contained herein (1) includes the confidential and proprietary information of ZACKS, (2) may not be copied or redistributed, for any purpose, (3) does not constitute investment advice offered by ZACKS, (4) are provided solely for informational purposes, and (5) are not warranted or represented to be correct, complete, accurate or timely. ZACKS shall not be responsible for investment decisions, damages or other losses resulting from, or related to, use of this information, data, analyses or opinions. Past performance is no guarantee of future performance. ZACKS is not affiliated with Chaikin Power Tools. This report from Chaikin Power Tools is for informational purposes only and is not a recommendation to buy or sell securities.

LM 2.3 DS 3.0 LS 2.1

Data Provided by ZACKS Investment Research, Inc., www.zacks.com

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