Microsoft (MSFT) closed the latest trading day at $433.51, indicating a -0.4% change from the previous session’s end. The stock’s change was less than the S&P 500’s daily gain of 0.28%. Meanwhile, the Dow experienced a rise of 0.15%, and the technology-dominated Nasdaq saw an increase of 0.15%.
The software maker’s shares have seen an increase of 4.43% over the last month, surpassing the Computer and Technology sector’s loss of 0.02% and the S&P 500’s gain of 2%.
Analysts and investors alike will be keeping a close eye on the performance of Microsoft in its upcoming earnings disclosure. The company’s earnings per share (EPS) are projected to be $3.09, reflecting a 3.34% increase from the same quarter last year. Meanwhile, the latest consensus estimate predicts the revenue to be $64.45 billion, indicating a 14.04% increase compared to the same quarter of the previous year.
Looking at the full year, the Zacks Consensus Estimates suggest analysts are expecting earnings of $13.04 per share and revenue of $277.6 billion. These totals would mark changes of +10.51% and +13.25%, respectively, from last year.
Furthermore, it would be beneficial for investors to monitor any recent shifts in analyst projections for Microsoft. Such recent modifications usually signify the changing landscape of near-term business trends. Therefore, positive revisions in estimates convey analysts’ confidence in the company’s business performance and profit potential.
Empirical research indicates that these revisions in estimates have a direct correlation with impending stock price performance. 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, stretching from #1 (Strong Buy) to #5 (Strong Sell), has a noteworthy track record of outperforming, validated by third-party audits, with stocks rated #1 producing an average annual return of +25% since the year 1988. Over the last 30 days, the Zacks Consensus EPS estimate has remained unchanged. At present, Microsoft boasts a Zacks Rank of #3 (Hold).
Looking at valuation, Microsoft is presently trading at a Forward P/E ratio of 33.39. This signifies a premium in comparison to the average Forward P/E of 28.79 for its industry.
We can also see that MSFT currently has a PEG ratio of 2.31. 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 average PEG ratio for the Computer – Software industry stood at 2.39 at the close of the market yesterday.
The Computer – Software industry is part of the Computer and Technology sector. With its current Zacks Industry Rank of 75, this industry ranks in the top 30% of all industries, numbering over 250.
The Zacks Industry Rank assesses the vigor of our specific industry groups by computing the average Zacks Rank of the individual stocks incorporated in 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 use Zacks.com to monitor all these stock-influencing metrics, and more, throughout the forthcoming trading sessions.
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