Microsoft has been an incredible profit engine, raking in some $12 billion in net income in fiscal year 2005 and again in 2006. But that didn’t seem to matter to investors. Its stock was stuck in a narrow price range in the mid-20s. Now, it seems, the winds are shifting. Its new operating system for PCs, Windows Vista, is out after a five-year wait, and analysts are high on the stock, with their average 12-month price target coming in at $35. Earnings forecasts are so buoyant that CEO Steve Ballmer cautioned analysts at a briefing on Feb. 15 that their expectations for sales next year of upgrades of Vista are “somewhat too bullish.” While Microsoft’s core PC software sales are robust, it faces challenges in online services, where its revenues are lagging, and in the video game market, where Nintendo’s Wii console has come on strong.
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|Economic Sector||Information Technology|