Microsoft (MSFT) closed the most recent trading day at $137.77, moving +0.58% from the previous trading session. The stock outpaced the S&P 500’s daily loss of 0.17%. At the same time, the Dow added 0.03%, and the tech-heavy Nasdaq lost 0.32%.
Prior to today’s trading, shares of the software maker had gained 8.55% over the past month. This has outpaced the Computer and Technology sector’s gain of 2.43% and the S&P 500’s gain of 3.07% 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 $1.21 per share, which would represent year-over-year growth of 7.08%. Meanwhile, our latest consensus estimate is calling for revenue of $32.73 billion, up 8.8% from the prior-year quarter.
For the full year, our Zacks Consensus Estimates are projecting earnings of $4.59 per share and revenue of $124.85 billion, which would represent changes of +18.3% and +13.13%, 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. 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.
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. The Zacks Consensus EPS estimate has moved 0.02% higher within the past month. MSFT is currently a Zacks Rank #2 (Buy).
In terms of valuation, MSFT is currently trading at a Forward P/E ratio of 29.87. For comparison, its industry has an average Forward P/E of 30, which means MSFT is trading at a discount to the group.
It is also worth noting that MSFT currently has a PEG ratio of 2.41. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company’s expected earnings growth rate into account. The Computer – Software was holding an average PEG ratio of 2.19 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 110, putting it in the top 43% 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.
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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