Microsoft (MSFT) closed at $472.93 in the latest trading session, marking a -2.21% move from the prior day. The stock’s change was less than the S&P 500’s daily gain of 0.19%. Meanwhile, the Dow gained 0.66%, and the Nasdaq, a tech-heavy index, lost 0.03%.
Shares of the software maker have appreciated by 0.58% over the course of the past month, outperforming the Computer and Technology sector’s gain of 0.02%, and the S&P 500’s gain of 0.54%.
Investors will be eagerly watching for the performance of Microsoft in its upcoming earnings disclosure. In that report, analysts expect Microsoft to post earnings of $3.86 per share. This would mark year-over-year growth of 19.5%. In the meantime, our current consensus estimate forecasts the revenue to be $80.16 billion, indicating a 15.12% growth compared to the corresponding quarter of the prior year.
For the annual period, the Zacks Consensus Estimates anticipate earnings of $15.61 per share and a revenue of $325.2 billion, signifying shifts of +14.44% and +15.43%, respectively, from the last year.
It’s also important for investors to be aware of any recent modifications to analyst estimates for Microsoft. Recent revisions tend to reflect the latest near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the business outlook.
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, which varies between #1 (Strong Buy) and #5 (Strong Sell), carries an impressive track record of exceeding expectations, confirmed by external audits, with stocks at #1 delivering an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has shifted 0.09% upward. Microsoft presently features a Zacks Rank of #3 (Hold).
Investors should also note Microsoft’s current valuation metrics, including its Forward P/E ratio of 30.97. This signifies a premium in comparison to the average Forward P/E of 22.43 for its industry.
Also, we should mention that MSFT has a PEG ratio of 1.84. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company’s projected earnings growth. As of the close of trade yesterday, the Computer – Software industry held an average PEG ratio of 1.93.
The Computer – Software industry is part of the Computer and Technology sector. Currently, this industry holds a Zacks Industry Rank of 63, positioning it in the top 26% of all 250+ industries.