Microsoft (MSFT) closed at $202.91 in the latest trading session, marking a -1.04% move from the prior day. This change lagged the S&P 500's 0.84% loss on the day. Elsewhere, the Dow lost 0.47%, while the tech-heavy Nasdaq lost 1.27%.
Prior to today's trading, shares of the software maker had lost 2.22% over the past month. This has lagged the Computer and Technology sector's gain of 0.69% and the S&P 500's gain of 0.6% in that time.
MSFT will be looking to display strength as it nears its next earnings release. In that report, analysts expect MSFT to post earnings of $1.53 per share. This would mark year-over-year growth of 10.87%. Meanwhile, our latest consensus estimate is calling for revenue of $35.68 billion, up 7.93% from the prior-year quarter.
Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $6.39 per share and revenue of $155.21 billion. These totals would mark changes of +10.94% and +8.53%, respectively, from last year.
Investors should also note any recent changes to analyst estimates for MSFT. These recent revisions tend to reflect the evolving nature of short-term business trends. 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, 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 past month, the Zacks Consensus EPS estimate has moved 0.06% lower. MSFT is currently sporting a Zacks Rank of #3 (Hold).
In terms of valuation, MSFT is currently trading at a Forward P/E ratio of 32.11. This represents a discount compared to its industry's average Forward P/E of 33.2.
Also, we should mention that MSFT has a PEG ratio of 2.34. 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 Computer - Software was holding an average PEG ratio of 2.55 at yesterday's closing price.
The Computer - Software industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 63, putting it in the top 25% 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.
You can find more information on all of these metrics, and much more, on Zacks.com.
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