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Microsoft (MSFT) Rises Higher Than Market: Key Facts

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In the latest trading session, Microsoft (MSFT - Free Report) closed at $448.37, marking a +1.31% move from the previous day. This move outpaced the S&P 500's daily gain of 0.77%. Elsewhere, the Dow gained 0.49%, while the tech-heavy Nasdaq added 0.95%.

Heading into today, shares of the software maker had gained 5.32% over the past month, outpacing the Computer and Technology sector's loss of 3.05% and the S&P 500's gain of 3.71% in that time.

The investment community will be paying close attention to the earnings performance of Microsoft in its upcoming release. On that day, Microsoft is projected to report earnings of $2.90 per share, which would represent year-over-year growth of 7.81%. Meanwhile, the latest consensus estimate predicts the revenue to be $64.16 billion, indicating a 14.19% increase compared to the same quarter of the previous year.

For the full year, the Zacks Consensus Estimates are projecting earnings of $11.77 per share and revenue of $244.41 billion, which would represent changes of +19.98% and +15.33%, respectively, from the prior year.

It's also important for investors to be aware of any recent modifications to analyst estimates for Microsoft. 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 suggests that these changes in estimates have a direct relationship with upcoming stock price performance. 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. Over the last 30 days, the Zacks Consensus EPS estimate has witnessed a 0.06% increase. Microsoft currently has a Zacks Rank of #3 (Hold).

In the context of valuation, Microsoft is at present trading with a Forward P/E ratio of 37.6. This signifies a premium in comparison to the average Forward P/E of 27.5 for its industry.

Investors should also note that MSFT has a PEG ratio of 2.34 right now. 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. MSFT's industry had an average PEG ratio of 2.36 as of yesterday's close.

The Computer - Software industry is part of the Computer and Technology sector. Currently, this industry holds a Zacks Industry Rank of 58, positioning it in the top 24% of all 250+ industries.

The strength of our individual industry groups is measured by the Zacks Industry Rank, which is calculated based on the average Zacks Rank of the individual stocks within these groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Don't forget to use to keep track of all these stock-moving metrics, and others, in the upcoming trading sessions.

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