Microsoft (MSFT) closed at $117.52 in the latest trading session, marking a -0.11% move from the prior day. This move was narrower than the S&P 500's daily loss of 0.29%. At the same time, the Dow lost 0.55%, and the tech-heavy Nasdaq gained 0.07%.
Prior to today's trading, shares of the software maker had gained 8.76% over the past month. This has outpaced the Computer and Technology sector's gain of 4.76% and the S&P 500's gain of 2.14% in that time.
Wall Street will be looking for positivity from MSFT as it approaches its next earnings report date. On that day, MSFT is projected to report earnings of $1 per share, which would represent year-over-year growth of 5.26%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $29.83 billion, up 11.24% from the year-ago period.
MSFT's full-year Zacks Consensus Estimates are calling for earnings of $4.41 per share and revenue of $123.87 billion. These results would represent year-over-year changes of +13.66% and +12.24%, respectively.
Any recent changes to analyst estimates for MSFT should also be noted by investors. 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.
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.
Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Within the past 30 days, our consensus EPS projection has moved 0.05% lower. MSFT currently has a Zacks Rank of #3 (Hold).
Digging into valuation, MSFT currently has a Forward P/E ratio of 26.69. For comparison, its industry has an average Forward P/E of 30.21, which means MSFT is trading at a discount to the group.
Meanwhile, MSFT's PEG ratio is currently 2.16. 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 2.18 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 23, putting it in the top 10% 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.
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