Microsoft (MSFT) ended the recent trading session at $383.34, demonstrating a +0.76% swing from the preceding day’s closing price. The stock’s change was more than the S&P 500’s daily gain of 0.49%. On the other hand, the Dow registered a loss of 0.2%, and the technology-centric Nasdaq increased by 1.22%.
Heading into today, shares of the software maker had lost 7.53% over the past month, outpacing the Computer and Technology sector’s loss of 12.07% and the S&P 500’s loss of 8.15% in that time.
The investment community will be paying close attention to the earnings performance of Microsoft in its upcoming release. In that report, analysts expect Microsoft to post earnings of $3.20 per share. This would mark year-over-year growth of 8.84%. In the meantime, our current consensus estimate forecasts the revenue to be $68.37 billion, indicating a 10.52% growth compared to the corresponding quarter of the prior year.
In terms of the entire fiscal year, the Zacks Consensus Estimates predict earnings of $13.08 per share and a revenue of $276.15 billion, indicating changes of +10.85% and +12.66%, respectively, from the former year.
It is also important to note the recent changes to analyst estimates for Microsoft. These revisions typically reflect the latest short-term business trends, which can change frequently. Therefore, positive revisions in estimates convey analysts’ confidence in the company’s business performance and profit potential.
Our research reveals that these estimate alterations are directly linked with the stock price performance in the near future. 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. Over the past month, the Zacks Consensus EPS estimate has moved 0.09% higher. Microsoft is currently sporting a Zacks Rank of #3 (Hold).
Valuation is also important, so investors should note that Microsoft has a Forward P/E ratio of 29.09 right now. This indicates a premium in contrast to its industry’s Forward P/E of 25.74.
One should further note that MSFT currently holds a PEG ratio of 2.02. The PEG ratio is akin to the commonly utilized P/E ratio, but this measure also incorporates the company’s anticipated earnings growth rate. The Computer – Software was holding an average PEG ratio of 2.05 at yesterday’s closing price.
