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Microsoft (MSFT) Gains But Lags Market: What You Should Know
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Microsoft (MSFT - Free Report) closed at $238.50 in the latest trading session, marking a +0.41% move from the prior day. This change lagged the S&P 500's 1.14% gain on the day. Elsewhere, the Dow gained 1.12%, while the tech-heavy Nasdaq lost 0.02%.
Wall Street will be looking for positivity from Microsoft as it approaches its next earnings report date. This is expected to be October 25, 2022. The company is expected to report EPS of $2.30, up 1.32% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $49.62 billion, up 9.5% from the year-ago period.
MSFT's full-year Zacks Consensus Estimates are calling for earnings of $10.03 per share and revenue of $218.57 billion. These results would represent year-over-year changes of +8.9% and +10.24%, respectively.
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. 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. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an 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. Over the past month, the Zacks Consensus EPS estimate has moved 0.65% lower. Microsoft is currently a Zacks Rank #4 (Sell).
In terms of valuation, Microsoft is currently trading at a Forward P/E ratio of 23.69. For comparison, its industry has an average Forward P/E of 22.64, which means Microsoft is trading at a premium to the group.
Also, we should mention that MSFT has a PEG ratio of 2.02. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Computer - Software was holding an average PEG ratio of 1.95 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 77, which puts it in the top 31% of all 250+ industries.
The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks 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 (MSFT) Gains But Lags Market: What You Should Know
Microsoft (MSFT - Free Report) closed at $238.50 in the latest trading session, marking a +0.41% move from the prior day. This change lagged the S&P 500's 1.14% gain on the day. Elsewhere, the Dow gained 1.12%, while the tech-heavy Nasdaq lost 0.02%.
Wall Street will be looking for positivity from Microsoft as it approaches its next earnings report date. This is expected to be October 25, 2022. The company is expected to report EPS of $2.30, up 1.32% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $49.62 billion, up 9.5% from the year-ago period.
MSFT's full-year Zacks Consensus Estimates are calling for earnings of $10.03 per share and revenue of $218.57 billion. These results would represent year-over-year changes of +8.9% and +10.24%, respectively.
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. 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. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an 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. Over the past month, the Zacks Consensus EPS estimate has moved 0.65% lower. Microsoft is currently a Zacks Rank #4 (Sell).
In terms of valuation, Microsoft is currently trading at a Forward P/E ratio of 23.69. For comparison, its industry has an average Forward P/E of 22.64, which means Microsoft is trading at a premium to the group.
Also, we should mention that MSFT has a PEG ratio of 2.02. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Computer - Software was holding an average PEG ratio of 1.95 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 77, which puts it in the top 31% of all 250+ industries.
The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks 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.