The latest trading session saw Microsoft (MSFT) ending at $454.46, denoting a +0.64% adjustment from its last day's close. The stock outpaced the S&P 500's daily loss of 0.39%. At the same time, the Dow lost 0.61%, and the tech-heavy Nasdaq lost 0.32%.
Prior to today's trading, shares of the software maker had gained 8.62% over the past month. This has outpaced the Computer and Technology sector's gain of 7.63% and the S&P 500's gain of 3.6% in that time.
Investors will be eagerly watching for the performance of Microsoft in its upcoming earnings disclosure. On that day, Microsoft is projected to report earnings of $3.14 per share, which would represent year-over-year growth of 7.17%. At the same time, our most recent consensus estimate is projecting a revenue of $68.75 billion, reflecting a 10.86% rise from the equivalent quarter last year.
Regarding the entire year, the Zacks Consensus Estimates forecast earnings of $12.93 per share and revenue of $277.69 billion, indicating changes of +9.58% and +13.29%, respectively, compared to the previous year.
Investors should also note any recent changes to analyst estimates for Microsoft. These revisions help to show the ever-changing nature of near-term business trends. As a result, upbeat changes in estimates indicate analysts' favorable outlook on the company's business health and profitability.
Our research suggests that these changes in estimates have a direct relationship with upcoming stock price performance. 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, spanning from #1 (Strong Buy) to #5 (Strong Sell), boasts an impressive track record of outperformance, audited externally, with #1 ranked stocks yielding an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has shifted 0.1% downward. At present, Microsoft boasts a Zacks Rank of #3 (Hold).
Looking at its valuation, Microsoft is holding a Forward P/E ratio of 34.92. This indicates a premium in contrast to its industry's Forward P/E of 32.43.
Meanwhile, MSFT's PEG ratio is currently 2.39. 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 Computer - Software industry had an average PEG ratio of 2.45 as trading concluded yesterday.
The Computer - Software industry is part of the Computer and Technology sector. With its current Zacks Industry Rank of 85, this industry ranks in the top 34% of all industries, numbering over 250.