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Here's Why Microsoft (MSFT) Fell More Than Broader Market

Microsoft (MSFT) closed the most recent trading day at $413.64, moving -1.96% from the previous trading session. This change lagged the S&P 500's 1.2% loss on the day. Meanwhile, the Dow lost 0.65%, and the Nasdaq, a tech-heavy index, lost 1.79%.

The the stock of software maker has risen by 1.32% in the past month, leading the Computer and Technology sector's loss of 0.51% and the S&P 500's loss of 0.85%.

Analysts and investors alike will be keeping a close eye on the performance of Microsoft in its upcoming earnings disclosure. The company's earnings report is set to go public on April 25, 2024. The company is forecasted to report an EPS of $2.81, showcasing a 14.69% upward movement from the corresponding quarter of the prior year. At the same time, our most recent consensus estimate is projecting a revenue of $60.63 billion, reflecting a 14.71% rise from the equivalent quarter last year.

Regarding the entire year, the Zacks Consensus Estimates forecast earnings of $11.61 per share and revenue of $243.54 billion, indicating changes of +18.35% and +14.92%, respectively, compared to the previous year.

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Any recent changes to analyst estimates for Microsoft should also be noted by investors. These latest adjustments often mirror the shifting dynamics of short-term business patterns. Therefore, positive revisions in estimates convey analysts' confidence in the company's business performance and profit potential.

Empirical research indicates that these revisions in estimates have a direct correlation with impending stock price performance. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system, spanning from #1 (Strong Buy) to #5 (Strong Sell), boasts an impressive track record of outperformance, audited externally, with #1 ranked stocks yielding an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 0.18% lower within the past month. Microsoft is holding a Zacks Rank of #3 (Hold) right now.

In terms of valuation, Microsoft is presently being traded at a Forward P/E ratio of 36.34. This represents a premium compared to its industry's average Forward P/E of 29.97.

Meanwhile, MSFT's PEG ratio is currently 2.25. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. Computer - Software stocks are, on average, holding a PEG ratio of 2.25 based on yesterday's closing prices.

The Computer - Software industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 82, putting it in the top 33% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual 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.

You can find more information on all of these metrics, and much more, on Zacks.com.

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Microsoft Corporation (MSFT) : Free Stock Analysis Report

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