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Microsoft (MSFT) Laps the Stock Market: Here's Why
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Microsoft (MSFT - Free Report) closed at $501.61 in the latest trading session, marking a +1.59% move from the prior day. The stock outpaced the S&P 500's daily gain of 1.49%. On the other hand, the Dow registered a gain of 0.71%, and the technology-centric Nasdaq increased by 2.26%.
Coming into today, shares of the software maker had gained 2.18% in the past month. In that same time, the Computer and Technology sector gained 2.97%, while the S&P 500 gained 0.1%.
The upcoming earnings release of Microsoft will be of great interest to investors. The company is forecasted to report an EPS of $4.69, showcasing a 13.56% upward movement from the corresponding quarter of the prior year. Simultaneously, our latest consensus estimate expects the revenue to be $90.6 billion, showing a 16.65% escalation compared to the year-ago quarter.
For the full year, the Zacks Consensus Estimates are projecting earnings of $19.62 per share and revenue of $389.42 billion, which would represent changes of +9.3% and +17.35%, respectively, from the prior year.
Investors should also pay attention to any latest changes in 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 business and profitability.
Our research suggests that these changes in estimates have a direct relationship with upcoming stock price performance. 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, running from #1 (Strong Buy) to #5 (Strong Sell), holds an admirable track record of superior performance, independently audited, with #1 stocks contributing an average annual return of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has witnessed a 0.01% increase. Currently, Microsoft is carrying a Zacks Rank of #3 (Hold).
In the context of valuation, Microsoft is at present trading with a Forward P/E ratio of 25.17. This denotes a premium relative to the industry average Forward P/E of 15.98.
We can additionally observe that MSFT currently boasts a PEG ratio of 1.59. The PEG ratio is akin to the commonly utilized P/E ratio, but this measure also incorporates the company's anticipated earnings growth rate. MSFT's industry had an average PEG ratio of 1.48 as of yesterday's close.
The Computer - Software industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 160, which puts it in the bottom 35% 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 follow all of these stock-moving metrics, and many more, on Zacks.com.
View the Zacks #1 Rank List
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Microsoft (MSFT) Laps the Stock Market: Here's Why
Microsoft (MSFT - Free Report) closed at $501.61 in the latest trading session, marking a +1.59% move from the prior day. The stock outpaced the S&P 500's daily gain of 1.49%. On the other hand, the Dow registered a gain of 0.71%, and the technology-centric Nasdaq increased by 2.26%.
Coming into today, shares of the software maker had gained 2.18% in the past month. In that same time, the Computer and Technology sector gained 2.97%, while the S&P 500 gained 0.1%.
The upcoming earnings release of Microsoft will be of great interest to investors. The company is forecasted to report an EPS of $4.69, showcasing a 13.56% upward movement from the corresponding quarter of the prior year. Simultaneously, our latest consensus estimate expects the revenue to be $90.6 billion, showing a 16.65% escalation compared to the year-ago quarter.
For the full year, the Zacks Consensus Estimates are projecting earnings of $19.62 per share and revenue of $389.42 billion, which would represent changes of +9.3% and +17.35%, respectively, from the prior year.
Investors should also pay attention to any latest changes in 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 business and profitability.
Our research suggests that these changes in estimates have a direct relationship with upcoming stock price performance. 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, running from #1 (Strong Buy) to #5 (Strong Sell), holds an admirable track record of superior performance, independently audited, with #1 stocks contributing an average annual return of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has witnessed a 0.01% increase. Currently, Microsoft is carrying a Zacks Rank of #3 (Hold).
In the context of valuation, Microsoft is at present trading with a Forward P/E ratio of 25.17. This denotes a premium relative to the industry average Forward P/E of 15.98.
We can additionally observe that MSFT currently boasts a PEG ratio of 1.59. The PEG ratio is akin to the commonly utilized P/E ratio, but this measure also incorporates the company's anticipated earnings growth rate. MSFT's industry had an average PEG ratio of 1.48 as of yesterday's close.
The Computer - Software industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 160, which puts it in the bottom 35% 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 follow all of these stock-moving metrics, and many more, on Zacks.com.