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In the latest trading session, Microsoft (MSFT) closed at $139.14, marking a -0.22% move from the previous day. This change lagged the S&P 500's daily loss of 0.01%. At the same time, the Dow added 0.06%, and the tech-heavy Nasdaq lost 0.06%.
Heading into today, shares of the software maker had gained 1.2% over the past month, lagging the Computer and Technology sector's gain of 2.92% and the S&P 500's gain of 3.23% in that time.
Investors will be hoping for strength from MSFT as it approaches its next earnings release. In that report, analysts expect MSFT to post earnings of $1.25 per share. This would mark year-over-year growth of 9.65%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $32.23 billion, up 10.83% from the year-ago period.
MSFT's full-year Zacks Consensus Estimates are calling for earnings of $5.23 per share and revenue of $139.88 billion. These results would represent year-over-year changes of +10.11% and +11.16%, respectively.
Any recent changes to analyst estimates for MSFT should also be noted by investors. 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.
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.
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. The Zacks Consensus EPS estimate has moved 0.13% higher within the past month. MSFT is currently sporting a Zacks Rank of #3 (Hold).
In terms of valuation, MSFT is currently trading at a Forward P/E ratio of 26.65. Its industry sports an average Forward P/E of 28.95, so we one might conclude that MSFT is trading at a discount comparatively.
It is also worth noting that MSFT currently has a PEG ratio of 2.42. 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 2.04 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 61, which puts it in the top 24% of all 250+ industries.