Microsoft (MSFT) Suffers a Larger Drop Than the General Market: Key Insights

Microsoft (MSFT) closed the most recent trading day at $378.85, moving -1.01% from the previous trading session. This change lagged the S&P 500's daily loss of 0.1%. At the same time, the Dow added 0.04%, and the tech-heavy Nasdaq lost 0.16%.

Shares of the software maker witnessed a gain of 13.19% over the previous month, trailing the performance of the Computer and Technology sector with its gain of 14.19% and outperforming the S&P 500's gain of 10.77%.

Analysts and investors alike will be keeping a close eye on the performance of Microsoft in its upcoming earnings disclosure. On that day, Microsoft is projected to report earnings of $2.75 per share, which would represent year-over-year growth of 18.53%. Alongside, our most recent consensus estimate is anticipating revenue of $61.02 billion, indicating a 15.68% upward movement from the same quarter last year.

For the entire fiscal year, the Zacks Consensus Estimates are projecting earnings of $11.13 per share and a revenue of $242.26 billion, representing changes of +13.46% and +14.32%, respectively, from the prior year.

It's also important for investors to be aware of any recent modifications to analyst estimates for Microsoft. These recent revisions tend to reflect the evolving nature of short-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about 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.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has moved 0.16% higher. Currently, Microsoft is carrying a Zacks Rank of #3 (Hold).

In terms of valuation, Microsoft is currently trading at a Forward P/E ratio of 34.39. This represents a premium compared to its industry's average Forward P/E of 29.9.

It is also worth noting that MSFT currently has a PEG ratio of 2.55. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. By the end of yesterday's trading, the Computer - Software industry had an average PEG ratio of 2.48.

The Computer - Software industry is part of the Computer and Technology sector. With its current Zacks Industry Rank of 45, this industry ranks in the top 18% 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.

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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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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