The most recent trading session ended with Microsoft (MSFT) standing at $424.83, reflecting a -1.32% shift from the previouse trading day’s closing. This change lagged the S&P 500’s 1.07% loss on the day. On the other hand, the Dow registered a loss of 0.97%, and the technology-centric Nasdaq decreased by 1.19%.
The software maker’s shares have seen an increase of 1.67% over the last month, not keeping up with the Computer and Technology sector’s gain of 4.8% and outstripping the S&P 500’s loss of 0.36%.
Investors will be eagerly watching for the performance of Microsoft in its upcoming earnings disclosure. The company’s earnings per share (EPS) are projected to be $3.14, reflecting a 7.17% increase from the same quarter last year. Simultaneously, our latest consensus estimate expects the revenue to be $68.75 billion, showing a 10.86% escalation compared to the year-ago quarter.
For the full year, the Zacks Consensus Estimates are projecting earnings of $12.93 per share and revenue of $277.69 billion, which would represent changes of +9.58% and +13.29%, respectively, from the prior year.
Investors might also notice recent changes to analyst estimates for Microsoft. Recent revisions tend to reflect the latest near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company’s business outlook.
Based on our research, we believe these estimate revisions are directly related to near-team stock moves. To capitalize on this, we’ve crafted the Zacks Rank, a unique model that incorporates these estimate changes and offers a practical rating system.
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. Within the past 30 days, our consensus EPS projection remained stagnant. As of now, Microsoft holds a Zacks Rank of #3 (Hold).
Looking at its valuation, Microsoft is holding a Forward P/E ratio of 33.3. This valuation marks a premium compared to its industry’s average Forward P/E of 32.44.
Meanwhile, MSFT’s PEG ratio is currently 2.28. 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 currently had an average PEG ratio of 2.3 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 56, putting it in the top 23% of all 250+ industries.
