How Will Microsoft (MSFT) Stock React to Reduced Cloud Storage Plans?
NEW YORK (TheStreet) -- Microsoft (MSFT) - Get Report is ending its unlimited OneDrive cloud storage plans after users reportedly abused the offering, according to a statement on Monday evening.
Starting in early 2016, customers who had the unlimited plan will be downgraded to one terabyte of storage. Those who are using more than one terabyte will have 12 months to lower their storage requirements.
The company is eliminating its 100 gigabyte and 200 gigabyte plans in favor of a 50 gigabyte plan priced at $1.99 per month. Its free storage plan will be cut to five gigabytes from 15 gigabytes.
The alterations come as competitors such as Apple (AAPL), Amazon.com (AMZN) and Google (GOOGL) have been increasing the affordability of their own cloud storage offerings, according to the Wall Street Journal.
Although Microsoft's one terabyte plan remains competitively priced at $6.99, the smaller plans have lost their edge, the Journal adds.
Shares of the company are up 1.38% to $53.98 in early afternoon trading on Tuesday.
Separately, TheStreet Ratings team rates MICROSOFT CORP as a Buy with a ratings score of A. TheStreet Ratings Team has this to say about their recommendation:
We rate MICROSOFT CORP (MSFT) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its solid stock price performance, increase in net income, reasonable valuation levels, expanding profit margins and good cash flow from operations. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The stock has not only risen over the past year, it has done so at a faster pace than the S&P 500, reflecting the earnings growth and other positive factors similar to those we have cited here. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the Software industry average. The net income increased by 1.8% when compared to the same quarter one year prior, going from $4,540.00 million to $4,620.00 million.
- The gross profit margin for MICROSOFT CORP is currently very high, coming in at 71.80%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 22.67% is above that of the industry average.
- Net operating cash flow has slightly increased to $8,594.00 million or 2.87% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -11.94%.
- You can view the full analysis from the report here: MSFT