🪟 MICROSOFT: DERIVATIVES TRADING 🪟

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🪟 MICROSOFT: DERIVATIVES TRADING 🪟


Microsoft Corporation develops and supports software, services, devices, and solutions worldwide. The company's Productivity and Business Processes segment offers Microsoft 365 Commercial, Enterprise Mobility + Security, Windows Commercial, Power BI, Exchange, SharePoint, Microsoft Teams, Security and Compliance, and Copilot; Microsoft 365 Commercial products, such as Windows Commercial on-premises and Office licensed services; Microsoft 365 Consumer products and cloud services, such as Microsoft 365 Consumer subscriptions, Office licensed on-premises, and other consumer services; LinkedIn; Dynamics products and cloud services, such as Dynamics 365, cloud-based applications, and on-premises ERP and CRM applications.

Margins LTM [06/02/26]:
- Gross margin: ≈ 68.6%
- Operating margin: ≈ 46.7%
- EBITDA margin: ≈ 57.3%
- Net margin: ≈ 39.1%
- ROIC: ≈ 23.1%
- Debt Net / EBITDA: ≈ 0.2x

Insights:
- P/S ratio near to 12x, currently it is in line with the average
- EV/EBITDA ratio near to 19x, more or less with the median
- PER ratio near to 25x, the lowest level in years
- Stagnation in FCF for a 2-year sample
- Slightly slowdown in EPS growth YoY
- Acceptable and strong margins and ROIC

Based on its last EPS [06/02/26 TTM] of ≈ $16.05 USD and a 30 Forward PER and a sensibility of ± 0.2255x annual, a hypothetical spread could be (ceteris paribus):
- High: ≈ $ 590.1 USD
- Neutral: ≈ $ 481.5 USD
- Down: ≈ $ 372.9 USD

Hypothesis

MSFT in the next >12 (perhaps 16) months, might have a strong distribution phase above ≈ $520 MXN and a strong accumulation phase below ≈ $395 MXN where there is a bullish bias due to its revaluation probabilities and other quantitative parameters
:::> It could be an acceptable risk to take

Hedge plan example:
- Call [sell]: $660 MXN
- Call [sell]: $520 MXN
- Put [sell]: $395 MXN
- Put [sell]: $300 MXN

Risks
- Prices higher than $520 for a long time
- Prices lower than $395 for a long time.
- The neutral price of ≈ $457.5 is not reached at expiration
- Roll over costs (if time is not well estimated)


The best analysis is yours!


J. Joel Padilla
▶️Telegram: https://t.me/JJPL_Index




Copyright: Joel Padilla 2026

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