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Microsoft (MSFT) Outpaces Stock Market Gains: What You Should Know

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In the latest trading session, Microsoft (MSFT) closed at $262.85, marking a +1.26% move from the previous day. The stock outpaced the S&P 500's daily gain of 0.16%. At the same time, the Dow lost 0.42%, and the tech-heavy Nasdaq gained 0.49%.

Coming into today, shares of the software maker had lost 3.41% in the past month. In that same time, the Computer and Technology sector lost 8.85%, while the S&P 500 lost 6.79%.

Investors will be hoping for strength from Microsoft as it approaches its next earnings release. The company is expected to report EPS of $2.30, up 5.99% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $52.38 billion, up 13.5% from the prior-year quarter.

Investors might also notice recent changes to analyst estimates for Microsoft. These recent revisions tend to reflect the evolving nature of short-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

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. Over the past month, the Zacks Consensus EPS estimate has moved 0.23% lower. Microsoft is currently a Zacks Rank #3 (Hold).

Looking at its valuation, Microsoft is holding a Forward P/E ratio of 24.52. This represents a no noticeable deviation compared to its industry's average Forward P/E of 24.52.

We can also see that MSFT currently has a PEG ratio of 2.12. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. MSFT's industry had an average PEG ratio of 2.12 as of yesterday's close.

The Computer - Software industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 161, which puts it in the bottom 37% 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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