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Microsoft (MSFT) Outpaces Stock Market Gains: What You Should Know

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Microsoft (MSFT) closed the most recent trading day at $307.29, moving +1.01% from the previous trading session. This move outpaced the S&P 500's daily gain of 0.34%.

Prior to today's trading, shares of the software maker had gained 1.45% over the past month. This has outpaced the Computer and Technology sector's loss of 2.7% and the S&P 500's loss of 0.12% in that time.

MSFT will be looking to display strength as it nears its next earnings release, which is expected to be October 26, 2021. The company is expected to report EPS of $2.06, up 13.19% from the prior-year quarter. 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 $190.12 billion, which would represent changes of +8.41% and +13.11%, respectively, from the prior year.

Any recent changes to analyst estimates for MSFT should also be noted by investors. These revisions typically reflect the latest short-term business trends, which can change frequently. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Our research shows that these estimate changes are directly correlated with near-term stock prices. 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, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 0.02% higher. MSFT is holding a Zacks Rank of #2 (Buy) right now.

Investors should also note MSFT's current valuation metrics, including its Forward P/E ratio of 35.19. Its industry sports an average Forward P/E of 35.19, so we one might conclude that MSFT is trading at a no noticeable deviation comparatively.

Also, we should mention that MSFT has a PEG ratio of 3.17. 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. The Computer - Software was holding an average PEG ratio of 3 at yesterday's closing price.

The Computer - Software industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 157, which puts it in the bottom 39% 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.

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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