Thanks a lot, Jimmy! I never realized that their cloud business has grown to 40%! Wow! I actually think your estimated value is not conservative. That 30% cash flow jump by analysts looks so high even compared to historical averages. Typically egregious cash flow growth is after periods of depressed growth which actually your chart shows too. So I would say your calculation is reasonable!
Great, great channel!!! Really appreciate the deep dive into the underlying business of a stock, almost nobody does that on YT. Interested to see your take on LVMH which is quite down now, thanks!
Very conservative figures / calculation for a high-quality business with a wide moat and secular tail winds, I also would like to buy it for < $300!! Even at this price I expect Microsoft to beat the market returns in the next 5 years (> 10% CAGR). Thanks for the analysis!!
I agree with this as well, when I was a bit less conservative in my assumptions, the fair value got to the low 340s, so shares under 300 would be a great buy 😀👍
Thanks Jimmy for the MSFT analysis. It's a great business with comfortable future outlook. One of the bests to own. Since I was twiddling my thumb and missed buying at $238-245, I am adamant to spend anything more than at $300. Even great things have a reasonable price. Your assumptions are not too conservative, I agree with you.
Hey Jimmy, Morningstar assigns a fair value at $410 for MSFT. Can you explain why there is such a big difference between the estimates? It’s really interesting to hear your opinion on that. Thanks ❤
DCF is based on many assumptions and on your desired ROI... If you assume conservative growth and annual ROI of 12% - the price will be much lower at about 170.
@ From Morningstar “Our fair value estimate for Microsoft is $490 per share, which implies a fiscal 2025 enterprise value/sales multiple of 13 times and an adjusted price/earnings multiple of 38 times. We model a 5-year compound annual growth rate, or CAGR, for revenue of approximately 13% inclusive of the Activision acquisition. We envision stronger revenue growth ahead as Microsoft's prior decade was bogged down by the downturn in 2008, the complete evaporation of mobile handset revenue from the disposal of the Nokia handset business, as well as the onset of the model transition to subscriptions (which initially results in slower revenue growth). However, we believe macro and currency factors will pressure revenue in the near-term. We believe revenue growth will be driven by Azure, Office 365, Dynamics 365, LinkedIn, and emerging Al adoption”
Thank you Jimmy.. i was just considering buying MSFT and other tech stocks.. especially bcos they normally do well when interest rates are cut.. but i think I'll hold off until msft corrects a bit
Problem with these beast of stocks is you can never buy them at fair falue, they are always overvalued in the present, then you look back and it was cheaper (like real estate lol)
That’s why I do not follow any fair value recommendations. That’s just based on their computations. It does not mean that the price will go down to that level. For me, as long as the fundamentals are improving and I saw a price dip, that’s when I buy. But I do reserve some money just in case the price goes down more so I can buy more.
What about in 2022 when many tech stocks dropped below their fair value. I agree that it is rare, especially great companies like this one. But I think we have to be careful of overpaying as well. So buying pullback does make sense, I would just be careful about overpaying in general
@@LearntoInvest that’s why I do not “over invest” the first time and reserve money if price goes down. Anyway, I’m buying quality businesses and planning to hold them the longest possible time. I may not get maximum profit but at least I own a portion of the business. For me, that’s better than not owning them at all coz I waited for the price to go down at fair value. That’s just my opinion and my strategy.
Hey Jimmy ! Thank you for all of your videos, I have been following you for years 😊! I would like to learn how to create a DFC model on excel ! Do you teach that ?
It's been a long time since you did INTC. I'm curious to hear your analysis on them, given the recent results, the way the business changed in the recent years and their recent dividend elimination.
I’m actually doing another deep dive on intel now to try to recalibrate what the investment thesis is. And ultimately to try to see if it looks like a good investment. Clearly a lot has happened since my last update
i think a top company like MSFT could trade down to your fv in a worst case scenario.. but as long as the market is healthy, it'll trade well above fv.
Hi Jimmy great information I am subscribed to your website and I have to say it's really of great benefit to me and the way I look at valuations now. I wanted to ask you in this video you said that Microsoft missed the expectations for cloud sale by 5%, my question is where can we get the information about segment expectations from? I can only find EPS and revenue expectations for companies but not segments expectations. Thank you again
So we’re about to push out an update for the site that’s going to have even more info, but have you jumped into our private discord channel that comes with your site membership? If you have shoot me a direct message there and I’ll get you whatever info you need and I’ll show you some of the features coming soon
@@LearntoInvest Yes I'd love to, I have discord but I am still learning my way around it and I am not that tech savvy :) how do I find the private discord channel?
Microsoft is very difficult to buy. It always goes up and trades with a premium. Even if thats understandable its still technically overvalued. But the general oppinion which results in the stock pricing expects good growth in the future, so if that growth happens the actual price for example will be fair next year and cheap in 2 years. I just buy everytime theres a bigger drawdown
Thanks a lot, Jimmy! I never realized that their cloud business has grown to 40%! Wow! I actually think your estimated value is not conservative. That 30% cash flow jump by analysts looks so high even compared to historical averages. Typically egregious cash flow growth is after periods of depressed growth which actually your chart shows too. So I would say your calculation is reasonable!
Great, great channel!!! Really appreciate the deep dive into the underlying business of a stock, almost nobody does that on YT. Interested to see your take on LVMH which is quite down now, thanks!
Great video! I fully agree with you. The company is priced for perfecton that might or might not come true.
Very conservative figures / calculation for a high-quality business with a wide moat and secular tail winds, I also would like to buy it for < $300!! Even at this price I expect Microsoft to beat the market returns in the next 5 years (> 10% CAGR). Thanks for the analysis!!
I totally agree with you…
I agree with this as well, when I was a bit less conservative in my assumptions, the fair value got to the low 340s, so shares under 300 would be a great buy 😀👍
Thanks Jimmy for the MSFT analysis. It's a great business with comfortable future outlook. One of the bests to own. Since I was twiddling my thumb and missed buying at $238-245, I am adamant to spend anything more than at $300. Even great things have a reasonable price. Your assumptions are not too conservative, I agree with you.
Disagree, you could buy MSFT at fair value in 2020 and in 2022
Hey Jimmy, Morningstar assigns a fair value at $410 for MSFT. Can you explain why there is such a big difference between the estimates? It’s really interesting to hear your opinion on that. Thanks ❤
My own DCF done 5 months ago had it at 373 for what it's worth. Projection 10 years into the future.
DCF is based on many assumptions and on your desired ROI... If you assume conservative growth and annual ROI of 12% - the price will be much lower at about 170.
Did Morningstar say how they determined their fair value?
@ From Morningstar “Our fair value estimate for Microsoft is $490 per share, which implies a fiscal 2025 enterprise value/sales multiple of 13 times and an adjusted price/earnings multiple of 38 times. We model a
5-year compound annual growth rate, or CAGR, for revenue of approximately 13% inclusive of the Activision acquisition. We envision stronger revenue growth ahead as Microsoft's prior decade was bogged down by the downturn in 2008, the complete evaporation of mobile handset revenue from the disposal of the Nokia handset business, as well as the onset of the model transition to subscriptions (which initially results in slower revenue growth). However, we believe macro and currency factors will pressure revenue in the near-term. We believe revenue growth will be driven by Azure, Office 365, Dynamics 365, LinkedIn, and emerging Al adoption”
Thank you Jimmy.. Could you please do a review of PBR?
Thank you Jimmy.. i was just considering buying MSFT and other tech stocks.. especially bcos they normally do well when interest rates are cut.. but i think I'll hold off until msft corrects a bit
Problem with these beast of stocks is you can never buy them at fair falue, they are always overvalued in the present, then you look back and it was cheaper (like real estate lol)
That’s why I do not follow any fair value recommendations. That’s just based on their computations. It does not mean that the price will go down to that level. For me, as long as the fundamentals are improving and I saw a price dip, that’s when I buy. But I do reserve some money just in case the price goes down more so I can buy more.
What about in 2022 when many tech stocks dropped below their fair value. I agree that it is rare, especially great companies like this one. But I think we have to be careful of overpaying as well. So buying pullback does make sense, I would just be careful about overpaying in general
@@LearntoInvest that’s why I do not “over invest” the first time and reserve money if price goes down. Anyway, I’m buying quality businesses and planning to hold them the longest possible time. I may not get maximum profit but at least I own a portion of the business. For me, that’s better than not owning them at all coz I waited for the price to go down at fair value. That’s just my opinion and my strategy.
Hey Jimmy ! Thank you for all of your videos, I have been following you for years 😊! I would like to learn how to create a DFC model on excel ! Do you teach that ?
Love your content as always Jimmy. Will you still be making the $DE video? Looking forward to your analysis
Yes, I plan on making it asap, I’ve just got to get a few done from earnings, then I’ll jump on Deere 😀👍
Holding at $275 when people were saying it was expensive then. Even told me Costco at $395 was too much……
It's been a long time since you did INTC. I'm curious to hear your analysis on them, given the recent results, the way the business changed in the recent years and their recent dividend elimination.
I’m actually doing another deep dive on intel now to try to recalibrate what the investment thesis is. And ultimately to try to see if it looks like a good investment. Clearly a lot has happened since my last update
I think it's a big yes.
i think a top company like MSFT could trade down to your fv in a worst case scenario.. but as long as the market is healthy, it'll trade well above fv.
Just look how good it's doing
Big yes today
Hi Jimmy great information I am subscribed to your website and I have to say it's really of great benefit to me and the way I look at valuations now. I wanted to ask you in this video you said that Microsoft missed the expectations for cloud sale by 5%, my question is where can we get the information about segment expectations from? I can only find EPS and revenue expectations for companies but not segments expectations. Thank you again
So we’re about to push out an update for the site that’s going to have even more info, but have you jumped into our private discord channel that comes with your site membership? If you have shoot me a direct message there and I’ll get you whatever info you need and I’ll show you some of the features coming soon
@@LearntoInvest Yes I'd love to, I have discord but I am still learning my way around it and I am not that tech savvy :) how do I find the private discord channel?
I think even before watching this video, I'll assume it's technically overvalued just cause it's at ATH...
Sooo, how is your investment in INTC going? (wink wink).
Wanna make a video about it?
Microsoft is very difficult to buy. It always goes up and trades with a premium. Even if thats understandable its still technically overvalued. But the general oppinion which results in the stock pricing expects good growth in the future, so if that growth happens the actual price for example will be fair next year and cheap in 2 years. I just buy everytime theres a bigger drawdown
MSFT is as overvalued as Sydney Sweeny's acting skills 😂
But yet you can get some joy out of it!
@@albertodejuan6104 surely we can 😂😂😂
You're missing her moat(s)
@@Synthminator it's hard to miss such attractive moat(s) 😂
I will gladly keep Sydney Sweeny and sell $MSFT
absolutely don't buy now