Microsoft (MSFT, $113.79) sues Foxconn over outstanding royalties
Last Friday, tech giant Microsoft entered federal court in San Jose, California to sue a unit of Taiwanese contract manufacturer Foxconn over unpaid royalties on the consumer devices it makes for others.
Microsoft has a patent license with Foxconn that demands the latter make payments for smartphones, tablets and other devices, as well as to provide an annual audit to Microsoft. The software giant says the company has defaulted on both counts in recent years.
In this suit, Microsoft disclosed that Foxconn had last submitted a report in 2014 but that it was an inaccurate one. It produced no further reports and paid no royalties for 2015-2018.
It is surprising why Foxconn stopped keeping its obligations. Taiwan's Foxconn on Tuesday responded to Microsoft’s patent infringement lawsuit by saying that as a contract manufacturer, it has never needed to pay any royalties to the software giant.
Following this suit, it now seems that Foxconn needs to own up to its defaults and pay back the outstanding royalties to Microsoft. However, the software giant still wants to work through the disagreement.
Historically, Microsoft has received significant royalties on Android-based phones and tablets from most key manufacturers.
MSFT's MACD Histogram just turned positive
The Moving Average Convergence Divergence (MACD) for MSFT turned positive on May 25, 2023. Looking at past instances where MSFT's MACD turned positive, the stock continued to rise in of 53 cases over the following month. The odds of a continued upward trend are .
Technical Analysis (Indicators)
Bullish Trend Analysis
The Momentum Indicator moved above the 0 level on April 26, 2023. You may want to consider a long position or call options on MSFT as a result. In of 94 past instances where the momentum indicator moved above 0, the stock continued to climb. The odds of a continued upward trend are .
Following a 3-day Advance, the price is estimated to grow further. Considering data from situations where MSFT advanced for three days, in of 339 cases, the price rose further within the following month. The odds of a continued upward trend are .
The Aroon Indicator entered an Uptrend today. In of 370 cases where MSFT Aroon's Indicator entered an Uptrend, the price rose further within the following month. The odds of a continued Uptrend are .
Bearish Trend Analysis
The RSI Indicator has been in the overbought zone for 1 day. Expect a price pull-back in the near future.
The Stochastic Oscillator entered the overbought zone. Expect a price pull-back in the foreseeable future.
Following a 3-day decline, the stock is projected to fall further. Considering past instances where MSFT declined for three days, the price rose further in of 62 cases within the following month. The odds of a continued downward trend are .
MSFT broke above its upper Bollinger Band on May 25, 2023. This could be a sign that the stock is set to drop as the stock moves back below the upper band and toward the middle band. You may want to consider selling the stock or exploring put options.
Fundamental Analysis (Ratings)
The Tickeron Profit vs. Risk Rating rating for this company is (best 1 - 100 worst), indicating low risk on high returns. The average Profit vs. Risk Rating rating for the industry is 89, placing this stock better than average.
The Tickeron Price Growth Rating for this company is (best 1 - 100 worst), indicating outstanding price growth. MSFT’s price grows at a higher rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron Valuation Rating of (best 1 - 100 worst) indicates that the company is slightly undervalued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (12.706) is normal, around the industry mean (31.381). P/E Ratio (36.101) is within average values for comparable stocks, (167.504). Projected Growth (PEG Ratio) (2.446) is also within normal values, averaging (4.103). Dividend Yield (0.008) settles around the average of (0.033) among similar stocks. P/S Ratio (11.990) is also within normal values, averaging (70.843).
The Tickeron SMR rating for this company is (best 1 - 100 worst), indicating very strong sales and a profitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
The Tickeron Seasonality Score of (best 1 - 100 worst) indicates that the company is slightly undervalued in the industry. The Tickeron Seasonality score describes the variance of predictable price changes around the same period every calendar year. These changes can be tied to a specific month, quarter, holiday or vacation period, as well as a meteorological or growing season.
The Tickeron PE Growth Rating for this company is (best 1 - 100 worst), pointing to outstanding earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
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Fundamental Analysis Ratings
The average fundamental analysis ratings, where 1 is best and 100 is worst, are as follows
