Microsoft (MSFT) Dips More Than Broader Markets: What You Should Know

Microsoft (MSFT) closed at $294.17 in the latest trading session, marking a -1.73% move from the prior day. This change lagged the S&P 500's daily loss of 0.28%.

Coming into today, shares of the software maker had lost 0.12% in the past month. In that same time, the Computer and Technology sector gained 0.55%, while the S&P 500 lost 0.56%.

Wall Street will be looking for positivity from MSFT as it approaches its next earnings report date. In that report, analysts expect MSFT to post earnings of $2.06 per share. This would mark year-over-year growth of 13.19%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $43.87 billion, up 18.09% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $8.64 per share and revenue of $190.1 billion, which would represent changes of +8.41% and +13.1%, respectively, from the prior year.

It is also important to note the recent changes to analyst estimates for MSFT. These revisions help to show the ever-changing nature of near-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 ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 0.02% higher within the past month. MSFT is holding a Zacks Rank of #2 (Buy) right now.

Valuation is also important, so investors should note that MSFT has a Forward P/E ratio of 34.63 right now. This valuation marks a discount compared to its industry's average Forward P/E of 34.96.

Also, we should mention that MSFT has a PEG ratio of 3.12. 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. The Computer - Software was holding an average PEG ratio of 2.96 at yesterday's closing price.

The Computer - Software industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 120, putting it in the top 48% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.

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