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Microsoft (MSFT) Laps the Stock Market: Here's Why
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Microsoft (MSFT - Free Report) closed the most recent trading day at $528.57, moving +2.17% from the previous trading session. This move outpaced the S&P 500's daily gain of 0.37%. At the same time, the Dow lost 0.14%, and the tech-heavy Nasdaq gained 0.71%.
The stock of software maker has risen by 4.52% in the past month, lagging the Computer and Technology sector's gain of 8.04% and overreaching the S&P 500's gain of 4.26%.
Market participants will be closely following the financial results of Microsoft in its upcoming release. In that report, analysts expect Microsoft to post earnings of $3.65 per share. This would mark year-over-year growth of 10.61%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $75.37 billion, up 14.93% from the year-ago period.
For the full year, the Zacks Consensus Estimates project earnings of $15.4 per share and a revenue of $321.15 billion, demonstrating changes of +12.9% and +14%, respectively, from the preceding year.
Investors should also note any recent changes to analyst estimates for Microsoft. Recent revisions tend to reflect the latest near-term business trends. As such, positive estimate revisions reflect analyst optimism about the business and profitability.
Research indicates that these estimate revisions are directly correlated with near-term share price momentum. 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 has moved 0.33% higher within the past month. At present, Microsoft boasts a Zacks Rank of #2 (Buy).
Digging into valuation, Microsoft currently has a Forward P/E ratio of 33.6. This indicates a premium in contrast to its industry's Forward P/E of 27.66.
It's also important to note that MSFT currently trades at a PEG ratio of 2.25. The PEG ratio bears resemblance to the frequently used P/E ratio, but this parameter also includes the company's expected earnings growth trajectory. The average PEG ratio for the Computer - Software industry stood at 2.1 at the close of the market yesterday.
The Computer - Software industry is part of the Computer and Technology sector. This industry, currently bearing a Zacks Industry Rank of 86, finds itself in the top 35% echelons of all 250+ industries.
The Zacks Industry Rank gauges the strength of our 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 use Zacks.com to monitor all these stock-influencing metrics, and more, throughout the forthcoming trading sessions.
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Microsoft (MSFT) Laps the Stock Market: Here's Why
Microsoft (MSFT - Free Report) closed the most recent trading day at $528.57, moving +2.17% from the previous trading session. This move outpaced the S&P 500's daily gain of 0.37%. At the same time, the Dow lost 0.14%, and the tech-heavy Nasdaq gained 0.71%.
The stock of software maker has risen by 4.52% in the past month, lagging the Computer and Technology sector's gain of 8.04% and overreaching the S&P 500's gain of 4.26%.
Market participants will be closely following the financial results of Microsoft in its upcoming release. In that report, analysts expect Microsoft to post earnings of $3.65 per share. This would mark year-over-year growth of 10.61%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $75.37 billion, up 14.93% from the year-ago period.
For the full year, the Zacks Consensus Estimates project earnings of $15.4 per share and a revenue of $321.15 billion, demonstrating changes of +12.9% and +14%, respectively, from the preceding year.
Investors should also note any recent changes to analyst estimates for Microsoft. Recent revisions tend to reflect the latest near-term business trends. As such, positive estimate revisions reflect analyst optimism about the business and profitability.
Research indicates that these estimate revisions are directly correlated with near-term share price momentum. 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 has moved 0.33% higher within the past month. At present, Microsoft boasts a Zacks Rank of #2 (Buy).
Digging into valuation, Microsoft currently has a Forward P/E ratio of 33.6. This indicates a premium in contrast to its industry's Forward P/E of 27.66.
It's also important to note that MSFT currently trades at a PEG ratio of 2.25. The PEG ratio bears resemblance to the frequently used P/E ratio, but this parameter also includes the company's expected earnings growth trajectory. The average PEG ratio for the Computer - Software industry stood at 2.1 at the close of the market yesterday.
The Computer - Software industry is part of the Computer and Technology sector. This industry, currently bearing a Zacks Industry Rank of 86, finds itself in the top 35% echelons of all 250+ industries.
The Zacks Industry Rank gauges the strength of our 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 use Zacks.com to monitor all these stock-influencing metrics, and more, throughout the forthcoming trading sessions.