Microsoft (MSFT) closed the most recent trading day at $157.71, moving -1.57% from the previous trading session. This change was narrower than the S&P 500’s daily loss of 1.6%. Meanwhile, the Dow lost 1.84%, and the Nasdaq, a tech-heavy index, lost 0.95%.
Coming into today, shares of the software maker had lost 7.27% in the past month. In that same time, the Computer and Technology sector lost 9.68%, while the S&P 500 lost 10.82%.
Wall Street will be looking for positivity from MSFT as it approaches its next earnings report date. In that report, analysts expect MSFT to post earnings of $1.32 per share. This would mark year-over-year growth of 15.79%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $34.20 billion, up 11.86% from the year-ago period.
Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $5.61 per share and revenue of $141.06 billion. These totals would mark changes of +18.11% and +12.09%, respectively, from last year.
Investors should also note any recent changes to analyst estimates for MSFT. 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.
Research indicates that these estimate revisions are directly correlated with near-term share price momentum. 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 0.28% lower within the past month. MSFT is currently sporting a Zacks Rank of #3 (Hold).
Valuation is also important, so investors should note that MSFT has a Forward P/E ratio of 28.58 right now. For comparison, its industry has an average Forward P/E of 26.3, which means MSFT is trading at a premium to the group.
Investors should also note that MSFT has a PEG ratio of 2.21 right now. 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 industry currently had an average PEG ratio of 2.11 as of yesterday’s close.
The Computer – Software industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 66, putting 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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