Yahoo Finance Microsoft (MSFT) Gains But Lags Market: What You Should Know
Microsoft (MSFT) closed at $262.63 in the latest trading session, marking a +1.23% move from the prior day. The stock lagged the S&P 500's daily gain of 1.4%.
Heading into today, shares of the software maker had gained 5.82% over the past month, lagging the Computer and Technology sector's gain of 7.26% and outpacing the S&P 500's gain of 1.07% in that time.
Wall Street will be looking for positivity from MSFT as it approaches its next earnings report date. The company is expected to report EPS of $1.90, up 30.14% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $44.07 billion, up 15.87% from the year-ago period.
For the full year, our Zacks Consensus Estimates are projecting earnings of $7.80 per share and revenue of $166.01 billion, which would represent changes of +35.42% and +16.08%, respectively, from the prior year.
It is also important to note the recent changes to analyst estimates for MSFT. Recent revisions tend to reflect the latest near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.
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.
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 past month, the Zacks Consensus EPS estimate has moved 0.01% higher. MSFT is currently a Zacks Rank #3 (Hold).
Digging into valuation, MSFT currently has a Forward P/E ratio of 33.27. This valuation marks a discount compared to its industry's average Forward P/E of 36.42.
Investors should also note that MSFT has a PEG ratio of 2.57 right now. 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 currently had an average PEG ratio of 2.58 as of yesterday's close.
The Computer - Software industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 182, putting it in the bottom 29% 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.
Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.
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