My Thoughts on Google, MSFT, INTC Earnings

My Thoughts on Google, MSFT, INTC Earnings

guys three companies just reported this
is the breakdown of the companies
Microsoft Intel and Google Microsoft
just reported we’re going to go over
them first 294 per share beating 284
share revenue of 61.9 billion versus
60.9 billion the stock here is up 4 a
half% to 417 still below its all-time
high from March 31st of
$430 per share now Microsoft’s
incredible business incredible software
business with some great numbers $2.98
trillion market cap that’s over that now
they’re back at the $3 trillion they did
$67 billion in free cash flow last year
signally lower than their net income
number but that’s okay high price to
free cash flow all right small dividend
of0 7% but guys because of how big the
market cap is that dividend eats up a
big chunk of their money huge money um
some big stuff here 70% gross margin
every time I do Microsoft I feel like
every year the gross margin increases
every single year and that’s what’s
incredible about them let’s go check out
their eight
pillars look at this guys eight pillars
right here six checks two x’s the two
x’s fiveyear PE fiveyear price of free
cash flow it shows that the this company
might be overpriced but remember guys
you should be willing to pay more for
great companies that have either really
good growth potential or staying power
you absolutely should be willing to pay
more how much more that’s the hard part
that’s what makes investing difficult
now remember I’m here teaching a process
I’m here teaching you how to think I
want us to sit there and stop believing
this is a great company therefore I
should buy it no stock price and Company
are very different things I want you to
remember that if you realize that you
can overpay for a good thing you’re on
the path of doing very well in investing
if you think that you buy a company just
because of the story put your money in
ETFs stop learn a process and you’ll
become a good investor over time but
you’ve got to remember that it’s
possible to overpay for a good thing
Microsoft’s a phenomenal company
phenomenal is it the right price well
let’s see what analysts are saying about
where Microsoft can go analyst estimates
1150 for the year for profit per share
going to $20 here in the next four years
Big Time growth 16 and a half% 15% 19%
10% and 15% again according to analysts
and that’s earnings per share Revenue
side oh wow 248 billion to 413 I’m
actually surprised I thought it would
have been a much lower growth rate
because of how high their gross margin
is I would have thought that they didn’t
need to grow their revenue as much to
really Drive earnings per share that’s
pretty incredible so what else is going
on with the good old Microsoft I want to
show you guys the history of Microsoft
here look at this Revenue
growth 93 91 97 110 125 43 168 198
2413
billion wow $212 billion sorry
incredible let’s look at their profit
here let’s look at their profit 20
billion 25 6 17 39 44 61 73
72 guys incredible absolutely incredible
business absolutely incredible business
you absolutely should pay more for it
question is how much so let’s go to our
stock analyzer tool
because it’s really important for us to
realize let me pull it up last time I
did Microsoft probably recently March
20th so guys on my 10-e analysis 10year
analysis I did for Revenue growth first
line 6 n and 12% low side six high side
12 middle n so I think to myself hey
they should be able to grow Revenue 9% a
year low side six if they really kill it
maybe 12% a year cloud computing is
still growing they’re beating here and
there maybe they do even better than I
think now for profit margin 10 years
last 10 years it was 30% Last 5 Years
35% last year 36 so it’s trending up I
put 32 34 and 36 free cash flow the same
over the last 10 years but for some
reason significally lower in the last
five so I still went a little I hedged a
little bit I put 28 31 and 34 if you put
the same numbers in here I don’t think
I’d blame you because there probably is
a lot of investment here in cloud
computing that hasn’t seen its way to
the income statement yet through
depreciation I don’t know I’m
speculating I’m just saying that I’m
looking at that going okay now for PE
current PE is 36 current price of free
cash flow is 44 what PE do you want to
sign to Microsoft 10 years from
now what do you think I don’t know I
look at it going I put 20 23 and 26
because I look at the market average
thinking 15 and going yeah but it’s
Microsoft High Returns on invested
Capital great margin great company 15 is
not appropriate is 30
appropriate no still in my opinion I
don’t think so so I put 20 23 and 26
feels right am I right I don’t know
that’s what makes investing hard we have
no idea a lot of it’s subjective we have
to figure that out and for my desired
return I put 9% across the board
basically what would I have to pay for
Microsoft to get the market average now
remember you should not buy a company to
make the same as the market you’re
better off just buying a long-term ETF
like spy or vo or if prices are
appropriate QQQ and let it ride that’s
more important so this price includes no
margin of safety you need to put margin
of safety in here I hit the analyze
button boom I have a low price of around
200 to 225 high price of 460 to 487
middle price at 300 to 330 so on the
high side if it crushes it yeah it can
make some pretty good money almost 11%
buying at today’s price of 418
but we need margin of safety it’s 10
years from now I think to buy an
individual company have margin of safety
company number two Intel now guys Intel
is a company I owned for a while exited
it made a few bucks and now it’s Fallen
guys they reported 18 cents in earnings
per share versus 13 cents expected so
they beat there but they missed on
Revenue 12.7 billion versus 12.8 billion
expected even though the 12.7 billion
was 9% higher than last year’s same
quarter they started to guide lower
they’re guiding for 10 cents per share
next quarter when they were all
previously guiding 24 cents a share and
revenue from 13.6 billion guidance to a
range of 12 and a half to 13 and a half
things are still tough for Intel the
chip business is a great business it’s a
growing business Intel is a great name
in it they’re building three major
factories in Germany Ohio and Arizona
there’s a lot of potential there but CEO
Pat is really working on a lot of issues
right now I like the fact that a few of
the execs have been buying shares that’s
great but there are a lot of issues for
Intel for me this is not going to be a
big position that I’m hoping to crush it
on because to me this is a turnaround
process they’ve gone from $80 billion in
Revenue down to like 50 so it’s time Hey
listen guys you need to figure things
out here that’s very important for me
all right so just to show you guys that
look at the income statements
here 79 billion in 2021 54 billion last
year 54 billion last year that’s big
drops guys profit look at look at this
21 21 21 20 8 1.7 big drops but again if
they’re able to get back to these levels
of20 billion a
year look at their current market cap
150 150 billion that would make them
seven and a half times earnings so the
question is is a juice worth a squeeze
here that’s something you have to figure
out maybe if you’re a little
apprehensive don’t put a lot into it I
don’t know it’s all up to you on what
you do but this is a potential but it’s
also very risky because they’re not it’s
not like a misunderstood company it’s a
company that actually is going through
problems and that can be scary and
investing is scary especially when you
see prices go against you now look at
Intel here look at how high it got
almost $70 a share back in 2020 and 21
then look how low it got I think it was
$25 a share or so let’s see 2473
there yeah it was basically 24 to $25 a
share for this stretch of time and then
went up to 50 and now back down today
after hours down 9% to $32 markets are
very fickle when stock was Hing 50
people were like Intel’s back baby all
they were saying was the stock is back
the company was going to do what it was
going to do the revenue was down a ton
still but it was almost getting back
here the other thing I want to show you
guys is the most important thing about
Intel this is its stock chart going back
to 200,000 guys look at this it has not
hit its 2,000 high of $75 or 7 581
October 28th 2000 7581 now you might be
thinking to yourself well yeah but the
revenue and profit are different hold
that thought in 2000 they did $34
billion in
Revenue okay after falling a ton
recently doing 58 billion or whatever it
is in 2000 they made 10 billion and L Le
been down but in previous years they
made 2ome billion double that number and
guess what the stock never recovered
that high it never got back up to that
all-time high isn’t that incredible but
double the profit and at one point
double the
revenue guys this is what I mean by that
let’s see what analysts think about this
this would be interesting a lot of
growth here 189 to 482 here in the next
three years so analyst are hoping for
some big turnaround here in the company
Revenue wise back up to all-time highs
here by 2027 59 billion to 81 billion so
guys again another company that has some
potential here but it’s a very scary
Road and that’s the thing about
investing when you see the stock fall
you wonder yourself Am I Wrong am I
right and investing can be when you’re
at home all by yourself you’re going to
talk yourself into a dizzy it’s crazy
we’ve all been there we’ve all made
emotional decisions from investing can I
ask you a question when was the last
time you made an emotional decision in
investing and you were happy you did it
we rarely are happy we did it most
people make only emotional decisions
what I’m doing is trying to teach you
the fundamentals the process to sit
there and say apply this to any
investment you have
I’m not trying to guide you to say buy
this or buy that that’s absolutely not
my goal my goal is to say this is how
you should think about investing whether
it’s stocks real estate business
whatever it is this is how you should
think about it but the hard part is with
the stock market is that ticker goes up
and down every single day and people out
there saying you’re right you’re wrong
watch CNBC those guys change their minds
every day depending on stocks are up or
down look at Jim Kramer that guy is that
guy just do the opposite of him he’ll
probably probably do Well’s at inverse
Kramer ETF and that’s why the community
was created with thousand of people in
here so there is a place for Value
investors or any investors to go in
there and have a
conversation there’s a reason why it’s
the largest YouTube community of
investors because people there think
very similarly now we don’t agree I
don’t think there’s a single value
investor I agree with fully not a single
one that that shouldn’t be the case that
should be the case they don’t agree with
me I don’t agree with them but our
thought process is the same applying
that thought process is what’s important
so if you’re interested in handling your
emotions better and getting a better
thought process so you can sleep better
at night and make better decisions click
the link below $7 for 7 Days make sure
you sign up cuz pretty soon we’re going
to have a weight list and when that
weight list hits once that weight list
hits it’ll be hard to get in you have to
wait I don’t know how much time but the
bottom line is we’re instituting a
weight list to make sure we can control
the number of users to make sure their
quality growth as opposed to just tons
of growth that’s very important for us
the value investing we’re value
investing into our users so stock
analyzer tool let’s go look up my
history of
Intel did it just a month
ago 10-year analysis I did three six and
11% Revenue growth not a ton not a ton
but it was pretty adequate profit margin
I did 18 22 and 26 which is awesome free
cash flow I kept the exact same thing
now for Price PE and price of free cash
flow I did 13 16 and 20 for both so I
went a little more I went a little more
conservative on this side saying listen
if they don’t really hit it well I want
to make sure I hedge myself here and of
course my 9% return again 9% no margin
of safety but you need margin of safety
because the future’s unknown we’re human
and we make mistakes and valuation is an
imprecise art it is not a science I
remember once I had a friend of mine say
well all three of you guys value these
companies and they’re all different
numbers yeah he’s like well I thought
you guys all number it’s like yeah but
it’s numbers but how you interpret the
numbers is what makes it difficult
that’s what makes it an art one person
looks at something and says this is crap
another person looks at it and says this
is awesome that’s what makes it an
artart that’s why I love the definition
of evaluation being an imprecise art
because it absolutely is
Art hit the analyze
button so guys we have a low price of 32
a high price of 110 middle price of 55
So based on today’s if you believe these
metrics and you do your research and
think this is a company for you there’s
some potential gains to be made here you
got to be patient absolutely have to be
patient on this company finally stock
number three the googly moly I remember
once recently somebody said they were so
excited when they saw me talk about
Google because they couldn’t wait for me
to say googly moly up 16% after hours
guys they crushed it they reported a
$189 versus a $150 expected revenue of
93.5 billion that’s including their
traffic acquisition costs beating 91.3
billion they announced their first
dividend ever and a $70 billion
repurchase now what that tells me is if
they’re paying a dividend and paying
buying back shares it tells me they
don’t have any use for the money they
don’t have any other reinvestment
because to me the dividend is the last
thing you should do with your cash flow
and when it comes to share repurchase
the stock better be cheap as F because
when you buy back expensive shares
you’re absolutely destroying shareholder
value and that bothers me but let’s see
Google’s probably the most reasonably
valued company of The Magnificent 7
let’s go check it out because look at
this growth here guys Google owns
YouTube and the goog look at this
Revenue growth 75 90 110 136 161 182 257
282 307 crust four times higher than
2015 in the revenue 75 to
307 that’s incredible let’s look at the
profit 16.4 19.5 12.7 30.7 34 40 76 60
74 from 16 to 74
what is that 5x almost almost
5x incredible absolutely absolutely
incredible let’s see what analysts think
about oh let’s look at the eight pillars
oh isn’t that a shock all check marks
except for our valuation metrics our
famous valuation metrics again Google
deserves a premium is 35 times the last
five years of profit appropriate well
keep in mind also that 5 years ago their
profit was a lot lower so this number
this 5year average is a lot lower and
it’s skewed currently the company is 27
times earnings and 28 times free cash
flow before by the way this big jump
right here that’s not factored in there
so increase that by 15% right now so
it’s almost 30 times it’s over 30 times
on the price of free cash flow and 30
times on the PE whoops it Daisy let’s
see what analysts think 688 a share to
314 a share 16% 15% 16 16 23% and again
they’re analysts they have the same
emotional bias we all do actually
actually probably worse because they
have career risk and for Revenue growth
350 billion this year to 505 in the next
four years double digit Revenue growth
for for four years so let’s see what my
estimates are on the
goog let’s pull it up here March 20th I
did it 10-y year analysis I did 58 11%
Revenue growth I did 22 24 and 26 profit
margin same thing with the free cash
flow margin now for my PE and price of
free cash flow 2023 and 26 same as
Microsoft I’m just looking at going this
is great it’s a great company they own
Google and YouTube two biggest search
engines in the world and again my 9% no
margin of safety desired return all
right guys 115 on the low side 260 on
the high after the jump up here 173 in
the
middle I have it at 130 on my watch list
I probably want to change that to 140
and I give Mo credit cuz Mo bought it
140 so guys if you’re interested in the
community click the link below and if
you want to see the 13 companies I
currently own watch our next video thank
you for your time

In this video, Paul Gabrail analyzes three stocks that recently had earnings calls: Microsoft stock, Intel stock, and Google stock. These are great businesses that also happen to have great numbers. Are these the best stocks to buy now for value investing? Find out and learn other investing strategies here!

0:00 MSFT
6:06 INTC
13:27 GOOG

#Earnings #EverythingMoney #StockMarket

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