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

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Microsoft (MSFT - Free Report) closed the most recent trading day at $280.98, moving +1.32% from the previous trading session. The stock outpaced the S&P 500's daily loss of 0.35%.

Heading into today, shares of the software maker had gained 6.71% over the past month, outpacing the Computer and Technology sector's gain of 4.23% and the S&P 500's gain of 3.36% 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 $1.90 per share. This would mark year-over-year growth of 30.14%. Meanwhile, our latest consensus estimate is calling for revenue of $44.07 billion, up 15.87% from the prior-year quarter.

Any recent changes to analyst estimates for MSFT should also be noted by investors. These recent revisions tend to reflect the evolving nature of short-term business trends. 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. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

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. The Zacks Consensus EPS estimate remained stagnant within the past month. MSFT is currently sporting a Zacks Rank of #3 (Hold).

Looking at its valuation, MSFT is holding a Forward P/E ratio of 33.39. This valuation marks a discount compared to its industry's average Forward P/E of 42.91.

It is also worth noting that MSFT currently has a PEG ratio of 2.58. 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 2.45 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 109, which puts it in the top 43% 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.

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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