The most recent trading session ended with Microsoft (MSFT) standing at $390.27, reflecting a +0.46% shift from the previouse trading day's closing. This change outpaced the S&P 500's 0.37% loss on the day. Meanwhile, the Dow lost 0.62%, and the Nasdaq, a tech-heavy index, lost 0.19%.
The the stock of software maker has risen by 4.25% in the past month, leading the Computer and Technology sector's gain of 1.22% and the S&P 500's gain of 1.56%.
Investors will be eagerly watching for the performance of Microsoft in its upcoming earnings disclosure. The company is forecasted to report an EPS of $2.75, showcasing a 18.53% upward movement from the corresponding quarter of the prior year. Alongside, our most recent consensus estimate is anticipating revenue of $61.03 billion, indicating a 15.71% upward movement from the same quarter last year.
Regarding the entire year, the Zacks Consensus Estimates forecast earnings of $11.14 per share and revenue of $242.41 billion, indicating changes of +13.56% and +14.39%, respectively, compared to the previous year.
Investors should also pay attention to any latest changes in analyst estimates for Microsoft. These latest adjustments often mirror the shifting dynamics of short-term business patterns. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.
Our research demonstrates that these adjustments in estimates directly associate with imminent stock price performance. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.
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. The Zacks Consensus EPS estimate has moved 0.09% higher within the past month. Microsoft is currently sporting a Zacks Rank of #3 (Hold).
In the context of valuation, Microsoft is at present trading with a Forward P/E ratio of 34.87. Its industry sports an average Forward P/E of 33.09, so one might conclude that Microsoft is trading at a premium comparatively.
We can additionally observe that MSFT currently boasts a PEG ratio of 2.26. The PEG ratio is akin to the commonly utilized P/E ratio, but this measure also incorporates the company's anticipated earnings growth rate. As the market closed yesterday, the Computer - Software industry was having an average PEG ratio of 2.24.
The Computer - Software industry is part of the Computer and Technology sector. With its current Zacks Industry Rank of 104, this industry ranks in the top 42% of all industries, numbering over 250.
The strength of our individual industry groups is measured by the Zacks Industry Rank, which is calculated based on the average Zacks Rank of the individual stocks within these groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Be sure to use Zacks.com to monitor all these stock-influencing metrics, and more, throughout the forthcoming trading sessions.
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