Microsoft (MSFT) closed the most recent trading day at $254.15, moving -1.06% from the previous trading session. This move was narrower than the S&P 500’s daily loss of 1.53%. At the same time, the Dow lost 1.72%, and the tech-heavy Nasdaq lost 3.27%.
Prior to today’s trading, shares of the software maker had gained 0.04% over the past month. This has outpaced the Computer and Technology sector’s loss of 1.34% and the S&P 500’s loss of 1.28% in that time.
Microsoft will be looking to display strength as it nears its next earnings release. On that day, Microsoft is projected to report earnings of $2.22 per share, which would represent no growth from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $51 billion, up 3.32% from the year-ago period.
MSFT’s full-year Zacks Consensus Estimates are calling for earnings of $9.34 per share and revenue of $208.75 billion. These results would represent year-over-year changes of +1.41% and +5.28%, respectively.
Investors might also notice recent changes to analyst estimates for Microsoft. These revisions help to show the ever-changing nature of 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.
The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 0.18% lower within the past month. Microsoft is currently a Zacks Rank #3 (Hold).
Digging into valuation, Microsoft currently has a Forward P/E ratio of 27.51. This valuation marks a discount compared to its industry’s average Forward P/E of 28.17.
We can also see that MSFT currently has a PEG ratio of 2.36. 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. MSFT’s industry had an average PEG ratio of 2.05 as of yesterday’s close.
The Computer – Software industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 64, which puts it in the top 26% of all 250+ industries.
The Zacks Industry Rank gauges the strength of our individual 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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