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

Microsoft (MSFT) closed at $146.92 in the latest trading session, marking a -0.96% move from the prior day. This move lagged the S&P 500's daily gain of 1.15%. Meanwhile, the Dow gained 2.39%, and the Nasdaq, a tech-heavy index, lost 0.45%.

Heading into today, shares of the software maker had lost 11.74% over the past month, outpacing the Computer and Technology sector's loss of 18.62% and the S&P 500's loss of 24.07% in that time.

Investors will be hoping for strength from MSFT as it approaches its next earnings release. On that day, MSFT is projected to report earnings of $1.31 per share, which would represent year-over-year growth of 14.91%. Our most recent consensus estimate is calling for quarterly revenue of $34.29 billion, up 12.17% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $5.64 per share and revenue of $141.59 billion, which would represent changes of +18.74% and +12.51%, respectively, from the prior year.

Investors might also notice recent changes to analyst estimates for MSFT. These recent revisions tend to reflect the evolving nature of short-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

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. Within the past 30 days, our consensus EPS projection has moved 0.04% higher. MSFT is currently a Zacks Rank #1 (Strong Buy).

Valuation is also important, so investors should note that MSFT has a Forward P/E ratio of 26.3 right now. For comparison, its industry has an average Forward P/E of 23.23, which means MSFT is trading at a premium to the group.

Also, we should mention that MSFT has a PEG ratio of 2.03. 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 was holding an average PEG ratio of 1.98 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 59, which puts it in the top 24% 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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