Microsoft (MSFT) Gains But Lags Market: What You Should Know
In the latest trading session, Microsoft (MSFT) closed at $149.93, marking a +0.05% move from the previous day. This change lagged the S&P 500's 0.15% gain on the day. At the same time, the Dow added 0.1%, and the tech-heavy Nasdaq gained 0.05%.
Heading into today, shares of the software maker had gained 4.02% over the past month, outpacing the Computer and Technology sector's gain of 1% and the S&P 500's gain of 1.32% in that time.
Investors will be hoping for strength from MSFT as it approaches its next earnings release. The company is expected to report EPS of $1.32, up 20% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $35.70 billion, up 9.96% from the year-ago period.
For the full year, our Zacks Consensus Estimates are projecting earnings of $5.35 per share and revenue of $140.11 billion, which would represent changes of +12.63% and +11.34%, respectively, from the prior year.
Investors might also notice 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. The Zacks Consensus EPS estimate has moved 0.04% higher within the past month. MSFT is holding a Zacks Rank of #2 (Buy) right now.
In terms of valuation, MSFT is currently trading at a Forward P/E ratio of 28. This valuation marks a discount compared to its industry's average Forward P/E of 31.
Investors should also note that MSFT has a PEG ratio of 2.35 right now. 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. MSFT's industry had an average PEG ratio of 2.28 as of yesterday's close.
The Computer - Software industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 86, which puts it in the top 34% of all 250+ industries.
The Zacks Industry Rank gauges the strength of our 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.
Make sure to utilize Zacks. Com to follow all of these stock-moving metrics, and more, in the coming trading sessions.
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