Microsoft (MSFT) closed the most recent trading day at $373.94, moving +1.8% from the previous trading session. This move outpaced the S&P 500's daily loss of 1.44%. Elsewhere, the Dow lost 0.09%, while the tech-heavy Nasdaq lost 2.22%.
Coming into today, shares of the software maker had lost 12.24% in the past month. In that same time, the Computer and Technology sector gained 0.98%, while the S&P 500 gained 0.08%.
The upcoming earnings release of Microsoft will be of great interest to investors. On that day, Microsoft is projected to report earnings of $4.21 per share, which would represent year-over-year growth of 15.34%. Meanwhile, the latest consensus estimate predicts the revenue to be $87.44 billion, indicating a 14.39% increase compared to the same quarter of the previous year.
For the annual period, the Zacks Consensus Estimates anticipate earnings of $17.33 per share and a revenue of $329.26 billion, signifying shifts of +27.05% and +16.87%, respectively, from the last year.
Investors should also pay attention to any latest changes in analyst estimates for Microsoft. These recent revisions tend to reflect the evolving nature of short-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the business outlook.
Our research suggests that these changes in estimates have a direct relationship with upcoming stock price performance. To exploit this, we've formed the Zacks Rank, a quantitative model that includes these estimate changes and presents a viable rating system.
Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has witnessed a 0% decrease. At present, Microsoft boasts a Zacks Rank of #3 (Hold).
In terms of valuation, Microsoft is currently trading at a Forward P/E ratio of 21.2. This denotes a premium relative to the industry average Forward P/E of 14.35.
We can also see that MSFT currently has a PEG ratio of 1.28. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The average PEG ratio for the Computer - Software industry stood at 1.28 at the close of the market yesterday.
The Computer - Software industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 104, which puts it in the top 43% of all 250+ industries.
The Zacks Industry Rank is ordered 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.
Keep in mind to rely on Zacks.com to watch all these stock-impacting metrics, and more, in the succeeding trading sessions.
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This article originally published on Zacks Investment Research (zacks.com).