William Blair analyst Jason Ader weighs in on Microsoft Corporation (NASDAQ:MSFT) following a solid fiscal fourth quarter for the company. Microsoft reported revenue that crushed estimates by an impressive $417 million. The company also beat EPS estimates by $0.11. The analyst attributes the company’s strong results to healthy commercial cloud business, spearheaded by Office 365 and Azure.

First quarter revenue guidance was $586 million below consensus at the midpoint, with bulls claiming that the decrease was due to “management conservatism.”  The analyst dismisses the bulls and believes that the lowered consensus reflects that The Street’s estimates are “overambitious.”

Cloud gross margins have decreased year-over-year to 42%. No operating margins were released for the company in their report, but the analyst notes that operating expense guidance was moderately higher than former expectations, pointing to flat or slightly higher spending.

The analyst believes that there is a good long-term position in MSFT, especially in the “cloud era of IT.”

The analyst issues a Market Perform rating for MSFT without releasing a price target.

According to TipRanks, the consensus price target for MSFT is $58.85, marking a 5.26% upside from current levels. 63% of analysts currently rate MSFT as a Buy, while 30% maintain a Hold rating, and 7% uphold a Sell rating for the stock.

Jason Ader is ranked #605 of 4,073 analysts on TipRanks. He sustains a success rate of 61% and an average return of 6.5%. When rating MSFT, Ader maintains a success rate of 0% and realizes an average profit of 0%.