The latest trading session saw Microsoft (MSFT) ending at $375.39, denoting a -0.9% adjustment from its last day's close. The stock trailed the S&P 500, which registered a daily gain of 0.55%. Elsewhere, the Dow saw an upswing of 1.01%, while the tech-heavy Nasdaq depreciated by 0.14%.
The software maker's stock has dropped by 4.58% in the past month, exceeding the Computer and Technology sector's loss of 8.88% and the S&P 500's loss of 6.22%.
Market participants will be closely following the financial results of Microsoft in its upcoming release. The company's earnings per share (EPS) are projected to be $3.20, reflecting an 8.84% increase from the same quarter last year. At the same time, our most recent consensus estimate is projecting a revenue of $68.37 billion, reflecting a 10.52% rise from the equivalent quarter last year.
Regarding the entire year, the Zacks Consensus Estimates forecast earnings of $13.08 per share and revenue of $276.15 billion, indicating changes of +10.85% and +12.66%, respectively, compared to the previous year.
Furthermore, it would be beneficial for investors to monitor any recent shifts in analyst projections 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 company's business health and profitability.
Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To capitalize on this, we've crafted the Zacks Rank, a unique model that incorporates these estimate changes and offers a practical 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. The Zacks Consensus EPS estimate remained stagnant within the past month. At present, Microsoft boasts a Zacks Rank of #3 (Hold).
From a valuation perspective, Microsoft is currently exchanging hands at a Forward P/E ratio of 28.96. This denotes a premium relative to the industry's average Forward P/E of 24.26.
Meanwhile, MSFT's PEG ratio is currently 2.01. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The Computer - Software industry currently had an average PEG ratio of 2.03 as of yesterday's close.
The Computer - Software industry is part of the Computer and Technology sector. With its current Zacks Industry Rank of 126, this industry ranks in the top 50% of all industries, numbering over 250.
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.
Ensure to harness Zacks.com to stay updated with all these stock-shifting metrics, among others, in the next trading sessions.
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This article originally published on Zacks Investment Research (zacks.com).
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
