Microsoft (MSFT) closed at $235.75 in the latest trading session, marking a -0.58% move from the prior day. This change lagged the S&P 500’s 0.1% gain on the day. At the same time, the Dow added 0.9%, and the tech-heavy Nasdaq lost 0.59%.
Coming into today, shares of the software maker had lost 3.01% in the past month. In that same time, the Computer and Technology sector lost 5.38%, while the S&P 500 gained 0.71%.
MSFT will be looking to display strength as it nears its next earnings release. On that day, MSFT is projected to report earnings of $1.76 per share, which would represent year-over-year growth of 25.71%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $40.94 billion, up 16.9% from the year-ago period.
For the full year, our Zacks Consensus Estimates are projecting earnings of $7.34 per share and revenue of $163.51 billion, which would represent changes of +27.43% and +14.33%, respectively, from the prior year.
Investors should also note any recent changes to analyst estimates for MSFT. These revisions typically reflect the latest short-term business trends, which can change frequently. With this in mind, we can consider positive estimate revisions a sign of optimism about the company’s business outlook.
Based on our research, we believe these estimate revisions are directly related to near-team stock moves. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.
The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. The Zacks Consensus EPS estimate remained stagnant within the past month. MSFT is holding a Zacks Rank of #2 (Buy) right now.
Investors should also note MSFT’s current valuation metrics, including its Forward P/E ratio of 32.31. For comparison, its industry has an average Forward P/E of 37.23, which means MSFT is trading at a discount to the group.
Also, we should mention that MSFT has a PEG ratio of 2.71. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company’s expected earnings growth rate. The Computer – Software was holding an average PEG ratio of 3.23 at yesterday’s closing price.
The Computer – Software industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 160, putting it in the bottom 38% of all 250+ industries.
The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Make sure to utilize Zacks. Com to follow all of these stock-moving metrics, and more, in the coming trading sessions.
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