Microsoft (MSFT - Free Report) closed the most recent trading day at $111.71, moving +0.42% from the previous trading session. This change outpaced the S&P 500's 0.04% gain on the day. Elsewhere, the Dow gained 0.11%, while the tech-heavy Nasdaq lost 0.23%.
Prior to today's trading, shares of the software maker had gained 1.53% over the past month. This has outpaced the Computer and Technology sector's gain of 1.5% and lagged the S&P 500's gain of 2.16% in that time.
MSFT will be looking to display strength as it nears its next earnings release, which is expected to be October 25, 2018. The company is expected to report EPS of $0.96, up 14.29% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $27.83 billion, up 13.4% from the year-ago period.
Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $4.25 per share and revenue of $122.36 billion. These totals would mark changes of +9.54% and +10.88%, respectively, from last year.
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. 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, 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 holding a Zacks Rank of #1 (Strong Buy) right now.
Valuation is also important, so investors should note that MSFT has a Forward P/E ratio of 26.19 right now. This valuation marks a discount compared to its industry's average Forward P/E of 36.39.
Investors should also note that MSFT has a PEG ratio of 2.13 right now. 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 2.29 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 50, which puts it in the top 20% 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.
Make sure to utilize Zacks. Com to follow all of these stock-moving metrics, and more, in the coming trading sessions.