Microsoft (MSFT) closed at $136.08 in the latest trading session, marking a -1.05% move from the prior day. This move lagged the S&P 500's daily gain of 0.03%. Meanwhile, the Dow gained 0.28%, and the Nasdaq, a tech-heavy index, lost 0.04%.
Prior to today's trading, shares of the software maker had gained 1.27% over the past month. This has lagged the Computer and Technology sector's gain of 2.03% and the S&P 500's gain of 2.25% in that time.
MSFT will be looking to display strength as it nears its next earnings release. The company is expected to report EPS of $1.24, up 8.77% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $32.21 billion, up 10.76% from the year-ago period.
For the full year, our Zacks Consensus Estimates are projecting earnings of $5.22 per share and revenue of $139.76 billion, which would represent changes of +9.89% and +11.06%, respectively, from the prior year.
Investors might also notice recent changes to analyst estimates for MSFT. Recent revisions tend to reflect the latest near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.
Our research shows that these estimate changes are directly correlated with near-term stock prices. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.
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 remained stagnant. 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 26.32. This valuation marks a discount compared to its industry's average Forward P/E of 27.82.
It is also worth noting that MSFT currently has a PEG ratio of 2.39. 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. Computer - Software stocks are, on average, holding a PEG ratio of 2.04 based on yesterday's closing prices.
The Computer - Software industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 54, putting it in the top 22% of all 250+ industries.
The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.
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