Microsoft (MSFT) closed the most recent trading day at $222.86, moving +0.66% from the previous trading session. This move outpaced the S&P 500’s daily loss of 0.63%. At the same time, the Dow lost 0.55%, and the tech-heavy Nasdaq lost 0.1%.
Coming into today, shares of the software maker had gained 7.78% in the past month. In that same time, the Computer and Technology sector gained 8.45%, while the S&P 500 gained 5.91%.
MSFT will be looking to display strength as it nears its next earnings release. The company is expected to report EPS of $1.53, up 10.87% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $35.67 billion, up 7.92% from the prior-year quarter.
Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $6.36 per share and revenue of $155.26 billion. These totals would mark changes of +10.42% and +8.56%, respectively, from last year.
Any recent changes to analyst estimates for MSFT should also be noted by investors. These revisions typically reflect the latest short-term business trends, which can change frequently. As such, positive estimate revisions reflect analyst optimism about the company’s business and profitability.
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 ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.37% lower. MSFT is currently sporting a Zacks Rank of #3 (Hold).
Digging into valuation, MSFT currently has a Forward P/E ratio of 34.8. Its industry sports an average Forward P/E of 34.92, so we one might conclude that MSFT is trading at a discount comparatively.
We can also see that MSFT currently has a PEG ratio of 2.54. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock’s expected earnings growth rate. The Computer – Software industry currently had an average PEG ratio of 2.79 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 97, which puts it in the top 39% of all 250+ industries.
The Zacks Industry Rank gauges the strength of our 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.
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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