Microsoft (MSFT) ended the recent trading session at $518.00, demonstrating a +1.88% change from the preceding day’s closing price. This change outpaced the S&P 500’s 0.49% gain on the day. Elsewhere, the Dow saw an upswing of 0.38%, while the tech-heavy Nasdaq appreciated by 0.72%.
The software maker’s shares have seen an increase of 0.83% over the last month, not keeping up with the Computer and Technology sector’s gain of 6.81% and the S&P 500’s gain of 2.99%.
The upcoming earnings release of Microsoft will be of great interest to investors. It is anticipated that the company will report an EPS of $3.65, marking a 10.61% rise compared to the same quarter of the previous year. Simultaneously, our latest consensus estimate expects the revenue to be $75.37 billion, showing a 14.93% escalation compared to the year-ago quarter.
Looking at the full year, the Zacks Consensus Estimates suggest analysts are expecting earnings of $15.39 per share and revenue of $321.15 billion. These totals would mark changes of +12.83% and +14%, respectively, from last year.
Investors might also notice recent changes to analyst estimates for Microsoft. These recent revisions tend to reflect the evolving nature of short-term business trends. As a result, upbeat changes in estimates indicate analysts’ favorable outlook on the business health and profitability.
Our research shows that these estimate changes are directly correlated with near-term stock prices. To capitalize on this, we’ve crafted the Zacks Rank, a unique model that incorporates these estimate changes and offers a practical 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 0.37% higher. At present, Microsoft boasts a Zacks Rank of #2 (Buy).
In terms of valuation, Microsoft is presently being traded at a Forward P/E ratio of 33.03. This represents a premium compared to its industry average Forward P/E of 28.36.
One should further note that MSFT currently holds a PEG ratio of 2.22. 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 had an average PEG ratio of 2.08 as trading concluded yesterday.
The Computer – Software industry is part of the Computer and Technology sector. Currently, this industry holds a Zacks Industry Rank of 78, positioning it in the top 32% of all 250+ industries.
