In the latest close session, Microsoft (MSFT) was down 1.41% at $383.34. This change lagged the S&P 500's 0.28% loss on the day. Meanwhile, the Dow experienced a drop of 1.09%, and the technology-dominated Nasdaq saw an increase of 0.2%.
Shares of the software maker have depreciated by 3.61% over the course of the past month, underperforming the Computer and Technology sector's loss of 1.22%, and the S&P 500's gain of 1.64%.
The investment community will be closely monitoring the performance of Microsoft in its forthcoming earnings report. On that day, Microsoft is projected to report earnings of $4.21 per share, which would represent year-over-year growth of 15.34%. Alongside, our most recent consensus estimate is anticipating revenue of $87.44 billion, indicating a 14.39% upward movement from the same quarter last year.
MSFT's full-year Zacks Consensus Estimates are calling for earnings of $17.33 per share and revenue of $329.26 billion. These results would represent year-over-year changes of +27.05% and +16.87%, respectively.
Investors might also notice recent changes to analyst estimates for Microsoft. These latest adjustments often mirror the shifting dynamics of short-term business patterns. 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. Over the last 30 days, the Zacks Consensus EPS estimate has witnessed a 0.02% increase. Microsoft currently has a Zacks Rank of #3 (Hold).
From a valuation perspective, Microsoft is currently exchanging hands at a Forward P/E ratio of 20.16. This signifies a premium in comparison to the average Forward P/E of 16.55 for its industry.
Meanwhile, MSFT's PEG ratio is currently 1.22. 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. As the market closed yesterday, the Computer - Software industry was having an average PEG ratio of 1.27.
The Computer - Software industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 103, putting it in the top 42% of all 250+ industries.
The Zacks Industry Rank gauges the strength of our individual 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.
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).