Will Microsoft (MSFT) Stock Be Affected By This Free Cloud Storage Increase?

NEW YORK (TheStreet) -- Microsoft Corp. (MSFT) announced on Monday that it has increased the amount of free cloud storage space it offers users to 15GB from 7GB, in order keep up with rival Google (GOOG) in the cloud storage market competition.

"We believe providing 15GB for free right out of the gate, with no hoops to jump through, will make it much easier for people to have their documents, videos, and photos available in one place," Microsoft OneDrive Group Program Manager Omar Shahine said.

Microsoft is also looking to get more people to sign up for its $9.99 per month Office 365 program, by offering subscribers 1TB of One Drive storage, an increase from 20GB.

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Shares of Microsoft are up 0.48% to $41.88.

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 largely solid financial position with reasonable debt levels by most measures, notable return on equity, reasonable valuation levels, increase in stock price during the past year and good cash flow from operations. We feel these strengths outweigh the fact that the company has had sub par growth in net income."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • Although MSFT's debt-to-equity ratio of 0.26 is very low, it is currently higher than that of the industry average. Along with this, the company maintains a quick ratio of 3.01, which clearly demonstrates the ability to cover short-term cash needs.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. 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.
  • Compared to where it was a year ago today, the stock is now trading at a higher level, regardless of the company's weak earnings results. 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.
  • MICROSOFT CORP's earnings per share declined by 5.5% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, MICROSOFT CORP increased its bottom line by earning $2.60 versus $2.00 in the prior year. This year, the market expects an improvement in earnings ($2.70 versus $2.60).
  • You can view the full analysis from the report here: MSFT Ratings Report
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