Welcome to our second Initiating Coverage Report. This report was constructed to offer an introduction into the Analytics, Cloud Services and Software industry with a detailed analysis of major players including Oracle, IBM, Tableau, Splunk, MicroStrategy, Microsoft, Amazon, Alphabet, CA and HP.
Within this report our favourite pick has been Microsoft (MSFT). According to our comparable analysis MSFT is trading at a premium, however we believe that there are intrinsic factors which offer room for further growth. We believe that Microsoft’s transition to the cloud will lead to a significant increase in recurring subscription revenue from Azure and Office 365, leading to double-digit EPS and FCF growth regardless of headwinds coming from a declining PC market. Although many investors have already started to turn more positive on MSFT’s cloud initiatives, we believe the full multi-year impact of Office 365 and Azure combined with the company's increased focus of operational efficiency is not properly reflected into Microsoft's stock price. Stay tuned as we take in an depth look at Microsoft in the coming weeks.
Managing Director, Technology Media & Telecommunications