Microsoft (MSFT) closed at $329.10 in the latest trading session, marking a -0.34% move from the prior day. This change lagged the S&P 500's daily gain of 0.07%. Meanwhile, the Dow gained 0.02%, and the Nasdaq, a tech-heavy index, added 0.01%.
Coming into today, shares of the software maker had gained 4.34% in the past month. In that same time, the Computer and Technology sector gained 1.5%, while the S&P 500 gained 0.38%.
Microsoft will be looking to display strength as it nears its next earnings release. In that report, analysts expect Microsoft to post earnings of $2.65 per share. This would mark year-over-year growth of 12.77%. Our most recent consensus estimate is calling for quarterly revenue of $54.42 billion, up 8.57% from the year-ago period.
MSFT's full-year Zacks Consensus Estimates are calling for earnings of $10.90 per share and revenue of $233.8 billion. These results would represent year-over-year changes of +11.11% and +10.33%, respectively.
It is also important to note the recent changes to analyst estimates for Microsoft. These revisions typically reflect the latest short-term business trends, which can change frequently. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.
Research indicates that these estimate revisions are directly correlated with near-term share price momentum. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.
The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate remained stagnant. Microsoft is holding a Zacks Rank of #3 (Hold) right now.
Valuation is also important, so investors should note that Microsoft has a Forward P/E ratio of 30.3 right now. For comparison, its industry has an average Forward P/E of 27.69, which means Microsoft is trading at a premium to the group.
We can also see that MSFT currently has a PEG ratio of 2.43. 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. Computer - Software stocks are, on average, holding a PEG ratio of 2.46 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 158, putting it in the bottom 38% of all 250+ industries.
The Zacks Industry Rank includes is listed in order 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.
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Microsoft Corporation (MSFT): Free Stock Analysis Report