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Microsoft (MSFT) Outpaces Stock Market Gains: What You Should Know

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Microsoft (MSFT - Free Report) closed at $107.51 in the latest trading session, marking a +1.27% move from the prior day. This change outpaced the S&P 500's 0.56% gain on the day. Elsewhere, the Dow gained 0.76%, while the tech-heavy Nasdaq lost 0.38%.

Heading into today, shares of the software maker had lost 5.88% over the past month, outpacing the Computer and Technology sector's loss of 8.65% and the S&P 500's loss of 6.76% in that time.

MSFT will be looking to display strength as it nears its next earnings release, which is expected to be January 30, 2019. The company is expected to report EPS of $1.09, up 13.54% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $32.30 billion, up 11.69% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $4.39 per share and revenue of $123.41 billion, which would represent changes of +13.14% and +11.83%, respectively, from the prior year.

Investors should also note any recent changes to analyst estimates for MSFT. 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.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, 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. Within the past 30 days, our consensus EPS projection has moved 3.32% higher. MSFT currently has a Zacks Rank of #2 (Buy).

Looking at its valuation, MSFT is holding a Forward P/E ratio of 24.2. This valuation marks a discount compared to its industry's average Forward P/E of 30.74.

Meanwhile, MSFT's PEG ratio is currently 1.94. 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. The Computer - Software industry currently had an average PEG ratio of 2.1 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 101, which puts it in the top 39% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow MSFT in the coming trading sessions, be sure to utilize Zacks.com.




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