Microsoft (MSFT) Rises Higher Than Market: Key Facts

In the latest trading session, Microsoft (MSFT) closed at $427.87, marking a +0.95% move from the previous day. Read More...

Microsoft (MSFT) closed the latest trading day at $427.87, indicating a +0.95% change from the previous session’s end. This change outpaced the S&P 500’s 0.26% gain on the day. At the same time, the Dow added 0.18%, and the tech-heavy Nasdaq gained 0.35%.

Prior to today’s trading, shares of the software maker had gained 2.2% over the past month. This has lagged the Computer and Technology sector’s gain of 6.38% and the S&P 500’s gain of 3.25% in that time.

Market participants will be closely following the financial results of Microsoft in its upcoming release. The company is expected to report EPS of $2.90, up 7.81% from the prior-year quarter. At the same time, our most recent consensus estimate is projecting a revenue of $64.16 billion, reflecting a 14.19% rise from the equivalent quarter last year.

Regarding the entire year, the Zacks Consensus Estimates forecast earnings of $11.77 per share and revenue of $244.41 billion, indicating changes of +19.98% and +15.33%, respectively, compared to the previous year.

Investors might also notice recent changes to analyst estimates for Microsoft. Such recent modifications usually signify the changing landscape of near-term business trends. Consequently, upward revisions in estimates express analysts’ positivity towards the company’s business operations and its ability to generate profits.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has moved 0.06% higher. Currently, Microsoft is carrying a Zacks Rank of #3 (Hold).

In the context of valuation, Microsoft is at present trading with a Forward P/E ratio of 36.01. This signifies a premium in comparison to the average Forward P/E of 26.86 for its industry.

It’s also important to note that MSFT currently trades at a PEG ratio of 2.24. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company’s projected earnings growth. As of the close of trade yesterday, the Computer – Software industry held an average PEG ratio of 2.3.

The Computer – Software industry is part of the Computer and Technology sector. This industry, currently bearing a Zacks Industry Rank of 75, finds itself in the top 30% echelons of all 250+ industries.

The Zacks Industry Rank assesses the strength of our separate industry groups by calculating the average Zacks Rank of the individual stocks contained within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Don’t forget to use Zacks.com to keep track of all these stock-moving metrics, and others, in the upcoming trading sessions.

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