The latest trading session saw Microsoft (MSFT) ending at $429.17, denoting a -0.27% adjustment from its last day’s close. The stock exceeded the S&P 500, which registered a loss of 0.74% for the day. Elsewhere, the Dow saw a downswing of 1.06%, while the tech-heavy Nasdaq depreciated by 0.58%.
The the stock of software maker has risen by 10.53% in the past month, leading the Computer and Technology sector’s gain of 7.86% and the S&P 500’s gain of 4.27%.
Analysts and investors alike will be keeping a close eye on the performance of Microsoft in its upcoming earnings disclosure. In that report, analysts expect Microsoft to post earnings of $2.90 per share. This would mark year-over-year growth of 7.81%. 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.
For the full year, the Zacks Consensus Estimates are projecting earnings of $11.77 per share and revenue of $244.41 billion, which would represent changes of +19.98% and +15.33%, respectively, from the prior year.
Furthermore, it would be beneficial for investors to monitor any recent shifts in analyst projections for Microsoft. These latest adjustments often mirror the shifting dynamics of short-term business patterns. As a result, we can interpret positive estimate revisions as a good sign for the company’s business outlook.
Our research shows that these estimate changes are directly correlated with near-term stock prices. To utilize this, we have created the Zacks Rank, a proprietary model that integrates these estimate changes and provides a functional rating system.
The Zacks Rank system, spanning from #1 (Strong Buy) to #5 (Strong Sell), boasts an impressive track record of outperformance, audited externally, with #1 ranked stocks yielding an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 0.22% higher within the past month. As of now, Microsoft holds a Zacks Rank of #3 (Hold).
Investors should also note Microsoft’s current valuation metrics, including its Forward P/E ratio of 36.56. This signifies a premium in comparison to the average Forward P/E of 28.67 for its industry.
It’s also important to note that MSFT currently trades at a PEG ratio of 2.27. 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 industry had an average PEG ratio of 2.41 as trading concluded yesterday.
The Computer – Software industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 53, which puts it in the top 22% of all 250+ industries.
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.
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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