Microsoft (MSFT) Falls More Steeply Than Broader Market: What Investors Need to Know
Microsoft (MSFT) closed at $409.54 in the latest trading session, marking a -1.57% move from the prior day. The stock fell short of the S&P 500, which registered a loss of 0.96% for the day. Meanwhile, the Dow experienced a drop of 0.94%, and the technology-dominated Nasdaq saw a decrease of 1.18%.
Prior to today's trading, shares of the software maker had gained 3.57% over the past month. This has lagged the Computer and Technology sector's gain of 7.35% and the S&P 500's gain of 4.3% in that time.
The upcoming earnings release of Microsoft will be of great interest to investors. It is anticipated that the company will report an EPS of $3.08, marking a 3.01% rise compared to the same quarter of the previous year. Meanwhile, the latest consensus estimate predicts the revenue to be $64.42 billion, indicating a 13.98% increase compared to the same quarter of the previous year.
For the full year, the Zacks Consensus Estimates project earnings of $13.04 per share and a revenue of $277.36 billion, demonstrating changes of +10.51% and +13.15%, respectively, from the preceding year.
Investors should also take note of any recent adjustments to analyst estimates for Microsoft. These recent revisions tend to reflect the evolving nature of short-term business trends. Therefore, positive revisions in estimates convey analysts' confidence in the company's business performance and profit potential.
Our research suggests that these changes in estimates have a direct relationship with upcoming stock price performance. To utilize this, we have created the Zacks Rank, a proprietary model that integrates these estimate changes and provides a functional rating system.
The Zacks Rank system, stretching from #1 (Strong Buy) to #5 (Strong Sell), has a noteworthy track record of outperforming, validated by third-party audits, with stocks rated #1 producing an average annual return of +25% since the year 1988. The Zacks Consensus EPS estimate has moved 0.01% lower within the past month. At present, Microsoft boasts a Zacks Rank of #4 (Sell).
In terms of valuation, Microsoft is presently being traded at a Forward P/E ratio of 31.92. This signifies a premium in comparison to the average Forward P/E of 29.31 for its industry.
One should further note that MSFT currently holds a PEG ratio of 2.21. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. The Computer - Software industry had an average PEG ratio of 2.38 as trading concluded yesterday.
The Computer - Software industry is part of the Computer and Technology sector. With its current Zacks Industry Rank of 62, this industry ranks in the top 25% of all industries, numbering over 250.
The Zacks Industry Rank assesses the strength of our separate industry groups by calculating the average Zacks Rank of the individual stocks contained 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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Microsoft Corporation (MSFT) : Free Stock Analysis Report