Microsoft (MSFT) closed at $454.79 in the latest trading session, marking a -1.1% move from the prior day. This move was narrower than the S&P 500's daily loss of 2.06%. Meanwhile, the Dow lost 1.76%, and the Nasdaq, a tech-heavy index, lost 2.39%.
The software maker's stock has dropped by 5.17% in the past month, falling short of the Computer and Technology sector's gain of 1.71% and the S&P 500's gain of 1.63%.
Market participants will be closely following the financial results of Microsoft in its upcoming release. The company plans to announce its earnings 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. Our most recent consensus estimate is calling for quarterly revenue of $80.16 billion, up 15.12% from the year-ago period.
For the full year, the Zacks Consensus Estimates project earnings of $15.61 per share and a revenue of $325.2 billion, demonstrating changes of +14.44% and +15.43%, respectively, from the preceding year.
It's also important for investors to be aware of any recent modifications to analyst estimates for Microsoft. Recent revisions tend to reflect the latest near-term business trends. As a result, upbeat changes in estimates indicate analysts' favorable outlook on the business health and profitability.
Our research suggests that these changes in estimates have a direct relationship with upcoming stock price performance. To capitalize on this, we've crafted the Zacks Rank, a unique model that incorporates these estimate changes and offers a practical rating system.
The Zacks Rank system, stretching from #1 (Strong Buy) to #5 (Strong Sell), has a noteworthy track record of outperforming, validated by third-party audits, with stocks rated #1 producing an average annual return of +25% since the year 1988. Within the past 30 days, our consensus EPS projection remained stagnant. Microsoft is currently sporting a Zacks Rank of #2 (Buy).
With respect to valuation, Microsoft is currently being traded at a Forward P/E ratio of 29.45. This expresses a premium compared to the average Forward P/E of 22.23 of its industry.
Also, we should mention that MSFT has a PEG ratio of 1.75. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. Computer - Software stocks are, on average, holding a PEG ratio of 1.71 based on yesterday's closing prices.
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 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.
Ensure to harness Zacks.com to stay updated with all these stock-shifting metrics, among others, in the next 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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