In the latest trading session, Microsoft (MSFT) closed at $505.41, marking a +1.97% move from the previous day. This change outpaced the S&P 500's 0.48% loss on the day. At the same time, the Dow lost 0.29%, and the tech-heavy Nasdaq lost 0.56%.
Shares of the software maker witnessed a gain of 0.05% over the previous month, trailing the performance of the Computer and Technology sector with its gain of 1.49%, and outperforming the S&P 500's loss of 0.82%.
The upcoming earnings release of Microsoft will be of great interest to investors. The company is forecasted to report an EPS of $4.67, showcasing a 13.08% upward movement from the corresponding quarter of the prior year. At the same time, our most recent consensus estimate is projecting a revenue of $90.53 billion, reflecting a 16.56% rise from the equivalent quarter last year.
For the full year, the Zacks Consensus Estimates are projecting earnings of $19.59 per share and revenue of $388.84 billion, which would represent changes of +9.14% and +17.18%, respectively, from the prior year.
It is also important to note the recent changes to analyst estimates for Microsoft. Such recent modifications usually signify the changing landscape of near-term business trends. As a result, upbeat changes in estimates indicate analysts' favorable outlook on the business health and profitability.
Research indicates that these estimate revisions are directly correlated with near-term share price momentum. 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, running from #1 (Strong Buy) to #5 (Strong Sell), holds an admirable track record of superior performance, independently audited, with #1 stocks contributing an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 0.07% higher. Currently, Microsoft is carrying a Zacks Rank of #3 (Hold).
With respect to valuation, Microsoft is currently being traded at a Forward P/E ratio of 25.3. This represents a premium compared to its industry average Forward P/E of 15.78.
It is also worth noting that MSFT currently has a PEG ratio of 1.6. 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 average PEG ratio for the Computer - Software industry stood at 1.43 at the close of the market yesterday.
The Computer - Software industry is part of the Computer and Technology sector. With its current Zacks Industry Rank of 104, this industry ranks in the top 43% of all industries, numbering over 250.
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.
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 Report
This article originally published on Zacks Investment Research (zacks.com).