Microsoft (MSFT) ended the recent trading session at $518.00, demonstrating a +1.88% change from the preceding day's closing price. This change outpaced the S&P 500's 0.49% gain on the day. Elsewhere, the Dow saw an upswing of 0.38%, while the tech-heavy Nasdaq appreciated by 0.72%.
The software maker's shares have seen an increase of 0.83% over the last month, not keeping up with the Computer and Technology sector's gain of 6.81% and the S&P 500's gain of 2.99%.
The upcoming earnings release of Microsoft will be of great interest to investors. It is anticipated that the company will report an EPS of $3.65, marking a 10.61% rise compared to the same quarter of the previous year. Simultaneously, our latest consensus estimate expects the revenue to be $75.37 billion, showing a 14.93% escalation compared to the year-ago quarter.
Looking at the full year, the Zacks Consensus Estimates suggest analysts are expecting earnings of $15.39 per share and revenue of $321.15 billion. These totals would mark changes of +12.83% and +14%, respectively, from last year.
Investors might also notice recent changes to analyst estimates for Microsoft. These recent revisions tend to reflect the evolving nature of short-term business trends. As a result, upbeat changes in estimates indicate analysts' favorable outlook on the business health and profitability.
Our research shows that these estimate changes are directly correlated with near-term stock prices. To capitalize on this, we've crafted the Zacks Rank, a unique model that incorporates these estimate changes and offers a practical rating system.
Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has moved 0.37% higher. At present, Microsoft boasts a Zacks Rank of #2 (Buy).
In terms of valuation, Microsoft is presently being traded at a Forward P/E ratio of 33.03. This represents a premium compared to its industry average Forward P/E of 28.36.
One should further note that MSFT currently holds a PEG ratio of 2.22. 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 had an average PEG ratio of 2.08 as trading concluded yesterday.
The Computer - Software industry is part of the Computer and Technology sector. Currently, this industry holds a Zacks Industry Rank of 78, positioning it in the top 32% 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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Microsoft Corporation (MSFT): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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