NEW YORK (TheStreet) -- Microsoft (MSFT) - Get Microsoft Corporation (MSFT) Report was gaining 1.4% to $38.40 Friday following reports that the software company is preparing to release a free version of Windows 8.1 as an upgrade for Windows 7 users.
A report from The Verge says Microsoft is experimenting with a version of Windows called "Windows 8.1 with Bing" that will come bundled with a number of Microsoft apps and services. The software would be a free or low-cost upgrade for Windows 7 users. Windows 8.1 with Bing could also cut down on licensing fees for PC manufacturers.
Microsoft will reportedly use the Bing platform and its services to monetize the cheaper Windows 8.1 with Bing.
Must read: Microsoft Plans Windows, Phone Updates for Spring
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 revenue growth, largely solid financial position with reasonable debt levels by most measures, notable return on equity, attractive valuation levels and solid stock price performance. We feel these strengths outweigh the fact that the company shows weak operating cash flow."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- MSFT's revenue growth has slightly outpaced the industry average of 10.8%. Since the same quarter one year prior, revenues rose by 14.3%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- MSFT's debt-to-equity ratio is very low at 0.27 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with this, the company maintains a quick ratio of 2.96, which clearly demonstrates the ability to cover short-term cash needs.
- Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Software industry and the overall market, MICROSOFT CORP's return on equity significantly exceeds that of both the industry average and the S&P 500.
- Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 35.45% over the past year, a rise that has exceeded that of the S&P 500 Index. Regarding the stock's future course, although almost any stock can fall in a broad market decline, MSFT should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
- You can view the full analysis from the report here: MSFT Ratings Report