In the latest trading session, Microsoft (MSFT) closed at $459.53, marking a -2.37% move from the previous day. This change lagged the S&P 500's daily loss of 0.53%. Elsewhere, the Dow saw a downswing of 0.09%, while the tech-heavy Nasdaq depreciated by 1%.
The software maker's shares have seen a decrease of 1.2% over the last month, not keeping up with the Computer and Technology sector's gain of 2.62% and the S&P 500's gain of 2.06%.
The investment community will be paying close attention to the earnings performance of Microsoft in its upcoming release. The company is slated to reveal its earnings on January 28, 2026. 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 latest consensus estimate predicts the revenue to be $80.16 billion, indicating a 15.12% increase compared to the same quarter of the previous year.
For the annual period, the Zacks Consensus Estimates anticipate earnings of $15.61 per share and a revenue of $325.2 billion, signifying shifts of +14.44% and +15.43%, respectively, from the last year.
Investors might also notice recent changes to analyst estimates for Microsoft. Recent revisions tend to reflect the latest near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the business outlook.
Empirical research indicates that these revisions in estimates have a direct correlation with impending stock price performance. To take advantage of this, we've established the Zacks Rank, an exclusive model that considers these estimated changes and delivers an operational rating system.
The Zacks Rank system, spanning from #1 (Strong Buy) to #5 (Strong Sell), boasts an impressive track record of outperformance, audited externally, with #1 ranked stocks yielding an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has shifted 0.16% upward. At present, Microsoft boasts a Zacks Rank of #2 (Buy).
Investors should also note Microsoft's current valuation metrics, including its Forward P/E ratio of 30.14. For comparison, its industry has an average Forward P/E of 22.73, which means Microsoft is trading at a premium to the group.
Also, we should mention that MSFT has a PEG ratio of 1.79. 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 1.82 as trading concluded yesterday.
The Computer - Software industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 80, putting it in the top 33% 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.
Be sure to follow all of these stock-moving metrics, and many 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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