Latest news with #MatthiasBalk
Forbes
3 days ago
- Business
- Forbes
Buy MSFT Stock At $460?
23 May 2025, Bavaria, Munich: The Microsoft logo and lettering can be seen on the Microsoft ... More Deutschland GmbH headquarters building in Parkstadt Schwabing in Munich (Bavaria) on May 23, 2025. Photo: Matthias Balk/dpa (Photo by Matthias Balk/picture alliance via Getty Images) Microsoft (NASDAQ:MSFT) stock has experienced a notable increase of 16% over the last month, surpassing the S&P 500's 6% rise. This growth is primarily attributed to Microsoft's impressive Q1 earnings exceeding expectations and a positive outlook, bolstered by its dominance in cloud computing and AI, especially with significant Azure growth. However, following its recent ascent, is MSFT stock still worth buying? Yes, we believe that MSFT stock, which is currently priced around $460, offers an appealing buying opportunity. Though its present valuation is elevated compared to the benchmark index, making it susceptible to negative events, we do not see any significant reasons for concern. Our assessment stems from a thorough evaluation of Microsoft's present valuation relative to its historical operational performance and financial condition. We have examined Microsoft against key criteria: Growth, Profitability, Financial Stability, and Downturn Resilience. This evaluation indicates a robust operational performance and financial status, which we will explain in more detail below. That being said, if you are looking for upside potential with lower volatility compared to individual stocks, the Trefis High Quality portfolio offers an alternative — it has outperformed the S&P 500 and achieved returns exceeding 91% since its launch. Separately, see – Nvidia Stock's 1 Big Risk Based on the price you pay per dollar of sales or profit, MSFT stock appears overpriced in relation to the broader market. Microsoft's Revenues have experienced significant growth in recent years. Microsoft's profit margins are significantly higher than those of most companies in the Trefis coverage universe. Microsoft's financial position is very solid. MSFT stock has experienced an impact that was slightly more favorable than the benchmark S&P 500 index during some recent downturns. Concerned about how a market crash might affect MSFT stock? Our dashboard How Low Can Microsoft Stock Go In A Market Crash? provides a comprehensive analysis of how the stock fared during and after previous market crashes. In conclusion, Microsoft's performance across the evaluated criteria is as follows: Microsoft has showcased strong performance in key financial metrics. Although its current valuation seems elevated compared to the broader market, it is consistent with Microsoft's own historical performance. For example, the current price-to-sales (P/S) ratio of 12.6x aligns with its 12.4x average over the past four years. Similarly, the price-to-earnings (P/E) ratio of 35x is in line with the stock's average P/E during the same timeframe. Looking forward, significant growth in Azure is expected to fuel further increases in valuation multiples. The company's revenue growth over the next three years is projected to average in the low double-digits, compared to a 12% average over the preceding three years. Overall, despite its recent increases, we believe MSFT stock continues to be an attractive buy at current levels. In fact, we estimate Microsoft's valuation to be $535 per share, indicating over 15% upside potential. Nevertheless, it is vital to recognize potential risks. A downturn in economic growth or a recession could result in decreased corporate investments in infrastructure, potentially affecting Microsoft's revenue growth. Even though MSFT stock has historically performed better than the benchmark index during economic downturns, a decline in its stock price during such situations cannot be dismissed. Not entirely satisfied with the volatile nature of MSFT stock? The Trefis High Quality (HQ) Portfolio, comprising 30 stocks, has a proven history of consistently outperforming the S&P 500 over the past four years. What accounts for this? As a collective, HQ Portfolio stocks have delivered superior returns with reduced risk compared to the benchmark index; a more stable investment experience, as demonstrated by HQ Portfolio performance metrics.
Forbes
6 days ago
- Business
- Forbes
Should You Buy or Sell CRM Stock Ahead of Its Earnings?
20 March 2025, Bavaria, Munich: The Salesforce logo and lettering can be seen on the facade of the ... More company's Munich headquarters on March 20, 2025 in Munich (Bavaria). Photo: Matthias Balk/dpa (Photo by Matthias Balk/picture alliance via Getty Images) Salesforce (NYSE:CRM) is set to announce its earnings on Wednesday, May 28, 2025. For traders who operate based on events, historical trends around earnings announcements can serve as a significant reference. In the past five years, CRM stock has exhibited a varied but predictable pattern the day after its earnings announcement: in 50% of occurrences, it posted a positive one-day return with a median increase of 7.4%, while in the remaining 50% of instances, it recorded a negative one-day return with a median decrease of 5.5%. Although actual results compared to consensus forecasts will greatly impact the stock's movement, grasping these historical probabilities can assist traders in positioning themselves effectively. There are two primary strategies for event-driven traders: assessing historical probabilities and taking a position prior to the earnings announcement, or watching the correlation between immediate and medium-term returns after the earnings are disclosed and then adjusting their positions accordingly. Analysts expect CRM to announce earnings of $2.55 per share on revenues of $9.75 billion, up from $2.44 per share on revenues of $9.13 billion for the same quarter last year. From a fundamental angle, CRM currently has a market cap of $262 billion. In the last twelve months, the company generated $38 billion in revenue, showcasing robust operational profitability with reported operating profits of $7.7 billion and a net income of $6.2 billion. If you are looking for potential gains with less volatility than individual stocks, the Trefis High Quality portfolio offers an alternative — it has surpassed the S&P 500 and yielded returns exceeding 91% since its inception. Also, see – What Sparked UNH Stock Crash? See earnings reaction history of all stocks Some insights on one-day (1D) post-earnings returns: Additional information for noted 5-Day (5D) and 21-Day (21D) returns following earnings is summarized along with the statistics in the table below. CRM 1D, 5D, and 21D Post Earnings Return A comparatively less risky approach (although not beneficial if the correlation is low) is to comprehend the correlation between short-term and medium-term returns after earnings, identify the pair that presents the highest correlation, and execute the relevant trade. For instance, if 1D and 5D indicate the highest correlation, a trader can position themselves "long" for the following 5 days if the 1D post-earnings return is positive. Here is some correlation data based on 5-year and 3-year (more recent) history. Note that the correlation 1D_5D refers to the relationship between 1D post-earnings returns and subsequent 5D returns. CRM Correlation Between 1D, 5D and 21D Historical Returns At times, the performance of peers can affect the stock's reaction post-earnings. In fact, the pricing might start even before the earnings are made public. Here is some historical data regarding the previous post-earnings performance of Salesforce stock compared to the stock performance of peers that reported earnings just prior to Salesforce. For fair comparison, peer stock returns also reflect post-earnings one-day (1D) returns. CRM Correlation With Peer Earnings Learn more about Trefis RV strategy that has outperformed its all-cap stocks benchmark (a combination of all three: the S&P 500, S&P mid-cap, and Russell 2000), delivering substantial returns for investors. Additionally, if you are looking for potential gains with a more stable performance than an individual stock like Salesforce, consider the High Quality portfolio, which has exceeded the S&P and achieved >91% returns since its inception.
Forbes
02-05-2025
- Business
- Forbes
Is Amazon Stock A Buy At $190?
29 April 2025, Bavaria, Munich: The logo and lettering of the global online mail order company ... More Amazon can be seen under the blue sky on the façade of Amazon Germany's headquarters in Parkstadt Schwabing in Munich (Bavaria) on April 29, 2025. Photo: Matthias Balk/dpa (Photo by Matthias Balk/picture alliance via Getty Images) Amazon stock (NASDAQ: AMZN) declined approximately 3% in after-market trading Thursday following the company's March quarter results. While the company beat overall sales and earnings expectations, its cloud revenue came in at $29.27 billion, falling short of the anticipated $29.42 billion. The company's Q2 outlook presented a mixed picture. Sales forecasts of $161.5 billion slightly exceeded analyst expectations of $161.2 billion, but projected operating income of $15.3 billion fell significantly below the consensus estimate of $17.6 billion. Amazon's management acknowledged uncertainties around tariffs but reported no current slowdown in demand. Now, if you are looking for an upside with a smoother ride than an individual stock, consider the High Quality portfolio, which has outperformed the S&P, and clocked >91% returns since inception. These kinds of diversified investment options may provide a buffer against the volatility that single stocks like Amazon could experience amid economic uncertainties. The moderate stock decline occurs against a backdrop of increasing economic challenges. The U.S. economy contracted in Q1 2025, and President Trump's recently implemented tariffs on key trading partners raise inflation concerns. In an environment of slowing economic growth, these pressures could lead companies to cut costs, potentially impacting cloud spending. This would negatively affect AWS, Amazon's most profitable business segment. Furthermore, a significant portion of products sold on Amazon's marketplace are sourced from China. The implementation of higher tariffs would likely force Amazon and its third-party sellers to raise prices for consumers. This price inflation could dampen consumer purchasing power and overall demand, potentially impacting Amazon's core e-commerce revenue. While Amazon has a diversified supply chain, the scale of Chinese imports makes the company particularly vulnerable to escalating trade tensions. Despite these challenges, AMZN stock currently trades at 3.1x trailing revenues, in line with its four-year average P/S ratio of 3.2x. However, the growing AWS business is improving Amazon's overall profitability, suggesting the stock deserves a higher valuation multiple than its historical average. With the stock now down over 20% from February highs, we believe tariff-related risks are somewhat priced in. We consider AMZN a strong long-term investment opportunity at prices around $190. Still, investing in a single stock like AMZN can be risky. On the other hand, the Trefis High Quality (HQ) Portfolio, with a collection of 30 stocks, has a track record of comfortably outperforming the S&P 500 over the last 4-year period. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index, less of a roller-coaster ride as evident in HQ Portfolio performance metrics.
Forbes
24-04-2025
- Business
- Forbes
This Fraud Detection Startup Made $100 Million Protecting Against Deepfake Calls
In 2024, Pindrop bolstered its offerings with a new product to use AI technology and determine if the caller is a machine or not. Photo by Matthias Balk/picture alliance via Getty Images) In January of last year, Atlanta-based startup Pindrop, a robocall and fraud-busting platform used mostly by call centers, had its 15 minutes of fame by defending the president. AI technology was being used to clone and impersonate former President Joe Biden's voice in New Hampshire, discouraging Democrats from voting. Pindrop was referenced across national media outlets as it accomplished what only a few in the space could: it identified the fraud at play and leveraged its massive collection of audio recordings to figure out what technology was used. Flash forward more than a year, and Pindrop has passed a new milestone in its more than 10 years of operations by reaching annual recurring revenue of more than $100 million. That growth is built on an increasingly lucrative offering in this new age of AI: Fighting deepfakes, or digitally created hoax recordings, images or videos, often used for nefarious reasons. 'Its growth reflects both the urgency of the challenge and the standout accuracy of its platform,' Martin Casado, a general partner at Andreessen Horowitz, a Pindrop investor, told Forbes. Pindrop offers three main products that combat fraud and identity theft. Its core products authenticate phone calls by verifying the caller's voice or if they're calling from a trusted device. In 2024, it bolstered its offerings with a new product to use AI technology and determine if the caller is a machine or not. Pindrop's services are already used at the call centers of eight of the ten largest banks, to screen calls, identifying suspicious speech patterns and outing fraudsters. And the company has been making inroads into health care and retail in recent years. Fighting voice impersonation hasn't always been a booming business. Pindrop entered the deepfake space in 2017 and quickly was noticed for identifying false voice clips from a documentary about chef Anthony Bourdain in 2018. These early detection abilities would evolve into its proprietary deepfake-identifying product. Before OpenAI released ChatGPT in 2023, the company saw one deepfake phone call across its entire customer base monthly. At that time, it would simply detect the call as fraudulent, and then staffers would analyze it. 'Twenty people at Pinrop would show up on a Zoom call and we'd all listen to the call,' CEO Vijay Balasubramaniyan said. But by the end of 2024, it was flagging an average of seven false calls per day, per customer. Balasubramaniyan says the company has seen a 111% increase in deepfake-related fraud attempts since 2022. 'What we have found is within the first four or five seconds of a deepfake call, they make so many mistakes and they make them in such unique ways that not only can we identify it's a deepfake, we know which engine made the mistake,' Balasubramaniyan says. Pindrop has been profitable since 2020, and completed a debt raise of $100 million last summer from Hercules Capital. It has raised more than $235 million in total venture capital and was last valued at $925 million with its $90 million raise in 2018. Balasubramaniyan says the 280 person company is not currently raising more money. 'After raising $200 million, man, you don't want more money, you have to be a real business,' he explained. Now, Pindrop is further building out this side of the business by continuing to invest in its deepfake detection abilities and aiming to integrate with job application processes and video meetings to detect more than just audio deepfakes. John Chambers, an angel investor and board member at Pindrop, who worked for decades as CEO at Cisco, says the total deepfake market is potentially worth tens of billions of dollars. "Customers will pay an unbelievable amount of money to know that they're not on a deepfake supply chain [or job applicant] call,' Chambers said, adding, 'It's a $60 billion market.' And Pindrop has positioned itself well in this goal. From its decade of fraud fighting, it has a database of 5 billion call recordings with 20 million deepfake audio files. The data set has allowed the company to sharpen its competitive edge against startups like identity verification provider Prove or deepfake protection platforms like Reality Defender and GetReal. In AI, that means keeping current with a fast-evolving technology and ever more realistic fakes. But Balasubramaniyan is confident in the company's AI detection abilities because audio data is so dynamic. The voice contains thousands of moments every second at which it can be examined, he says. For every advantage Pindrop scores with its tech, a bad actor will surely find a new attack, Balasubramaniyan says. Pindrop's advantage is that it's still more expensive for fraudsters to generate a deepfake than to detect one. 'Deepfakes are going to get better, but we're not going to be sitting around twiddling our thumbs,' Balasubramaniyan says.
Forbes
22-04-2025
- Business
- Forbes
How To Trade IBM Stock Ahead of Its Earnings?
20 March 2025, Bavaria, Munich: The IBM logo at the headquarters of IBM Germany in the Highlight ... More Towers in Parkstadt Schwabing in Munich (Bavaria). Photo: Matthias Balk/dpa (Photo by Matthias Balk/picture alliance via Getty Images) International Business Machines is set to announce its earnings on Wednesday, April 23, 2025. Historical trends indicate that the stock often responds positively to earnings releases. Over the last five years, IBM has delivered positive one-day returns in 60% of earnings announcements, with a median gain of 4.8% and a maximum single-day jump of 13%. For event-driven traders, analyzing these historical trends may offer an edge, though actual stock movement will ultimately depend on how results align with market expectations and analyst estimates. Two primary trading strategies emerge: IBM currently commands a market capitalization of $221 billion. Over the trailing twelve months, the company has posted $63 billion in revenue, with $10 billion in operating profit and $6.0 billion in net income. Consensus projections for the upcoming earnings call for earnings per share of $1.43 on revenue of $14.4 billion. This is a decline compared to the $1.68 EPS and $14.5 billion in sales from the same quarter last year, which had included a one-time gain from the sale of the Weather Company. For those looking for upside potential with less volatility than individual stocks, the Trefis High-Quality Portfolio is a compelling alternative, having outperformed the S&P 500 with returns exceeding 91% since launch. See earnings reaction history of all stocks Key insights on one-day (1D) returns after earnings: Further details for 5-day (5D) and 21-day (21D) post-earnings returns are available in the table below. IBM observed 1D, 5D, and 21D returns post earnings A more conservative trading strategy—assuming a strong correlation exists—is to assess how short-term post-earnings movements align with medium-term outcomes. If, for instance, 1D and 5D returns exhibit the highest correlation, a trader could adopt a 'long' position for the next 5 days following a positive 1D return. Below is correlation data based on both 5-year and 3-year records. Note that 1D_5D denotes the relationship between the 1-day and 5-day post-earnings returns. IBM Correlation Between 1D, 5D and 21D Historical Returns Discover more about the Trefis RV strategy, which has outperformed its all-cap benchmark index (including the S&P 500, S&P MidCap, and Russell 2000), generating impressive investor returns. For a more stable investment path compared to single stocks like IBM, you might also consider the High-Quality Portfolio, which has surpassed the S&P with returns of over 91% since inception. Invest with Trefis Market Beating Portfolios | Rules-Based Wealth
