Microsoft (MSFT) closed the most recent trading day at $486.00, moving +1.8% from the previous trading session. The stock outperformed the S&P 500, which registered a daily gain of 0.96%. Meanwhile, the Dow gained 0.89%, and the Nasdaq, a tech-heavy index, added 0.94%.
Shares of the software maker have appreciated by 6.05% over the course of the past month, outperforming the Computer and Technology sector's gain of 2.53%, and the S&P 500's gain of 0.5%.
Analysts and investors alike will be keeping a close eye on the performance of Microsoft in its upcoming earnings disclosure. The company is forecasted to report an EPS of $3.35, showcasing a 13.56% upward movement from the corresponding quarter of the prior year. Alongside, our most recent consensus estimate is anticipating revenue of $73.71 billion, indicating a 13.88% upward movement from the same quarter last year.
For the full year, the Zacks Consensus Estimates project earnings of $13.36 per share and a revenue of $279.09 billion, demonstrating changes of +13.22% and +13.86%, respectively, from the preceding 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. Hence, positive alterations in estimates signify analyst optimism regarding the business and profitability.
Our research shows that these estimate changes are directly correlated with near-term stock prices. To exploit this, we've formed the Zacks Rank, a quantitative model that includes these estimate changes and presents a viable rating system.
The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has witnessed an unchanged state. Microsoft is currently a Zacks Rank #3 (Hold).
Valuation is also important, so investors should note that Microsoft has a Forward P/E ratio of 35.74 right now. Its industry sports an average Forward P/E of 25.16, so one might conclude that Microsoft is trading at a premium comparatively.
We can additionally observe that MSFT currently boasts a PEG ratio of 2.42. The PEG ratio is akin to the commonly utilized P/E ratio, but this measure also incorporates the company's anticipated earnings growth rate. The Computer - Software industry had an average PEG ratio of 2.4 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 43, positioning it in the top 18% of all 250+ industries.
The Zacks Industry Rank assesses the vigor of our specific industry groups by computing the average Zacks Rank of the individual stocks incorporated in the groups. 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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