Microsoft (MSFT) closed the most recent trading day at $478.11, moving -1.11% from the previous trading session. The stock fell short of the S&P 500, which registered a gain of 0.01% for the day. On the other hand, the Dow registered a gain of 0.55%, and the technology-centric Nasdaq decreased by 0.44%.
Prior to today's trading, shares of the software maker had gained 1.03% outpaced the Computer and Technology sector's loss of 0.69% and the S&P 500's gain of 0.86%.
The upcoming earnings release of Microsoft will be of great interest to investors. The company's earnings report is expected on January 28, 2026. The company is predicted to post an EPS of $3.86, indicating a 19.5% growth compared to the equivalent quarter last year. Simultaneously, our latest consensus estimate expects the revenue to be $80.16 billion, showing a 15.12% escalation compared to the year-ago quarter.
MSFT's full-year Zacks Consensus Estimates are calling for earnings of $15.61 per share and revenue of $325.2 billion. These results would represent year-over-year changes of +14.44% and +15.43%, respectively.
Any recent changes to analyst estimates for Microsoft should also be noted by investors. Recent revisions tend to reflect the latest near-term business trends. Therefore, positive revisions in estimates convey analysts' confidence in the business performance and profit potential.
Our research shows that these estimate changes are directly correlated with near-term stock prices. 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 varies between #1 (Strong Buy) and #5 (Strong Sell), carries an impressive track record of exceeding expectations, confirmed by external audits, with stocks at #1 delivering an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has shifted 0.16% upward. As of now, Microsoft holds a Zacks Rank of #2 (Buy).
Looking at valuation, Microsoft is presently trading at a Forward P/E ratio of 30.96. This denotes a premium relative to the industry average Forward P/E of 23.03.
It's also important to note that MSFT currently trades at a PEG ratio of 1.84. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. MSFT's industry had an average PEG ratio of 1.91 as of yesterday's close.
The Computer - Software industry is part of the Computer and Technology sector. This industry, currently bearing a Zacks Industry Rank of 74, finds itself in the top 31% echelons of all 250+ industries.
The Zacks Industry Rank evaluates the power of our distinct industry groups by determining the average Zacks Rank of the individual stocks forming the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
You can find more information on all of these metrics, and much more, on 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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