Microsoft (MSFT) closed the most recent trading day at $483.84, moving +1.62% from the previous trading session. The stock's performance was ahead of the S&P 500's daily gain of 0.79%. At the same time, the Dow added 0.14%, and the tech-heavy Nasdaq gained 1.38%.
The stock of software maker has fallen by 2.26% in the past month, lagging the Computer and Technology sector's loss of 0.85% and the S&P 500's gain of 0.87%.
Market participants will be closely following the financial results of Microsoft in its upcoming release. It is anticipated that the company will report an EPS of $3.86, marking a 19.5% rise compared to the same quarter of the previous year. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $80.16 billion, up 15.12% from the year-ago period.
For the entire fiscal year, the Zacks Consensus Estimates are projecting earnings of $15.59 per share and a revenue of $325.15 billion, representing changes of +14.3% and +15.42%, respectively, from the prior year.
Additionally, investors should keep an eye on any recent revisions to analyst forecasts for Microsoft. These recent revisions tend to reflect the evolving nature of short-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the business outlook.
Our research shows that these estimate changes are directly correlated with near-term stock prices. To utilize this, we have created the Zacks Rank, a proprietary model that integrates these estimate changes and provides a functional rating system.
The Zacks Rank system, running from #1 (Strong Buy) to #5 (Strong Sell), holds an admirable track record of superior performance, independently audited, with #1 stocks contributing an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 0.19% higher. Microsoft currently has a Zacks Rank of #3 (Hold).
In terms of valuation, Microsoft is currently trading at a Forward P/E ratio of 30.55. This signifies a premium in comparison to the average Forward P/E of 23.55 for its industry.
We can additionally observe that MSFT currently boasts a PEG ratio of 1.81. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. As of the close of trade yesterday, the Computer - Software industry held an average PEG ratio of 1.82.
The Computer - Software industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 74, putting it in the top 30% of all 250+ industries.
The Zacks Industry Rank is ordered from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
To follow MSFT in the coming trading sessions, be sure to utilize Zacks.com.
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Microsoft Corporation (MSFT): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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