Beleaguered Microsoft’s hardships continue

“We maintain our Neutral investment rating on shares of Microsoft,” Stephen Turner reports for Hilliard Lyons via Barron’s.

“We have a suitability rating of 2 [‘A historically secure company which could be cyclical, has a shorter history than a ‘1’ or is subject to event-driven setbacks’] based on the company’s declining free-cash-flow generation which has negatively affected our discounted cash flow (DCF) model fair-value target,” Turner reports. “We believe significantly higher share prices in the near term are only currently achievable if management can reduce the company’s expenses, divest certain businesses, and continue to repurchase shares and boost the dividend.”

“We continue to advise investor caution on shares of Microsoft,” Turner reports. “In our opinion, significant risks remain going forward as the consumer PC market shifts to mobile devices; Office transitions to a subscription service; hardware sales negatively affect gross margins; the integration of a potentially declining Nokia [devices and services] business; and as Satya Nadella, the new chief executive of Microsoft, steers the company in a mobile-first, services-first direction.”

Read more in the full article here.

[Thanks to MacDailyNews Reader “Fred Mertz” for the heads up.]

40 Comments

    1. That’s fascinating, considering that no matter what Apple seems to do, their stock price goes down. For example, I can almost guarantee that no matter how much of a monster hit the upcoming iPhone 6 is, the market and those that speculate upon it will react in predicable bullish fashion.

    2. Cook is a target of stupidity. He’s brought record breaking profits to Apple even with the stupidity all around in the market and anal-ists who don’t know tech from there A-hole.
      They keep screaming for innovation but don’t understand that innovation is not a wave of a magic wand that can be done at request of stupidity. It takes a lot of time and a lot of work to make a new kind of product. If all companies were rated or reviewed by innovation then most would be considered total failures long ago. Why? Because most of these other companies have been copying, stealing, ripping off Apple’s innovation for the past 7 years. None of them know anything about innovation yet everyone blames Tim Cook at Apple. Apple wouldn’t be profitable if Tim Cook didn’t know what he was doing. Give him enough time those innovations that everyone keeps screaming about will come and blow you away. But let’s get real, it takes time. But the stupid anal-ists will keep screaming and putting Apple’s stocks down. Oh well. I don’t see any other company coming up with anything innovative right now. Samsung’s supposed smart watch is a fricking joke. Google’s TV’s are crap. Amazon just copied the Apple TV almost literally. Microsoft is totally lost there way. So scream all you want Tim Cook is doing a great job when you look at the competition I see no innovation either. First to market doesn’t mean its better and everyone knows that Apple doesn’t do first. It just does better and that’s what I’m waiting for.

      1. Funny that you complain about ‘stupid’ people but then spell their ‘there’. You have the logic and debating skills of a walnut and the grammar of an illiterate baboon.
        In the years following Jobs’ ouster from Apple the company did very well. It took time for the RDF to wear off, but wear off it did.
        The same is happening again.
        Cook is doing F-ALL to give us any confidence in Apple’s future.
        OS X development is pathetic, Siri is useless, Maps is still a joke, app updates result in dumbed down garbage (read the reviews, it’s not pretty) while iOS looks like Japanese teenagers designed it.
        Apple under Cook is more concerned with leftist political BS and lawsuits than innovating, and guess what; people are noticing.

          1. Forums online are mostly populated by Nobama voters for whom mindless argumentum ad hominem is preferred to actual thought.
            If it ever gets to the point where my views agree with the online ignorati then I know I’m screwed up.
            One star this if you were ‘educated’ in a government school.

  1. I had a chuckle when the report said Microsoft’s margins were in jeopardy because they’re starting to sell hardware. Yes, they’re going from a 90% margin (not too hyperbolic, I hope!) for software sales to a hardware model with margins below 40%, which is historically how Apple has grow to be the world’s highest capitalized technology company. So, what’s great for Apple is bad news for Microsoft. Nice to see Microsoft is going to have to actually start working for its cash flow. They’ve skated on their monopoly cash flow for too long.

    1. Exactly, Dave. Bill Gates’s brilliant stratagem to licence software made him and his cronies billionaires. Those easy days are grinding to a halt. It’s a new, brilliant day, the harsh sun now desiccating the bodies of these crawling toads with hard radiation.

        1. Well, in New Mexico we have these toads that get stranded between ponds rapidly drying in the sun, and it made me think of Bill Gates. The mind can form strange associations…it’s not exactly poetry, more like revenge fantasies…

            1. New Mexico is where I happen to live at the moment, when I’m not in Boca Raton or Dover. Doesn’t everyone repair to another residence with the changing season?

            1. That poor man is valiantly trying to change the world single-handed, yet you and other ruffians bully him mercilessly. Does he emit some lexical pheromone I fail to detect?

    1. It’s not MDN, it’s something affecting websites all over the place, something to do with code placed in adverts designed to take you straight to the App Store. Royal PTA, too.

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