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

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Microsoft (MSFT - Free Report) closed at $107.14 in the latest trading session, marking a +0.63% move from the prior day. This move outpaced the S&P 500's daily gain of 0.33%. At the same time, the Dow added 0.44%, and the tech-heavy Nasdaq gained 0.01%.

Heading into today, shares of the software maker had gained 2.52% over the past month, outpacing the Computer and Technology sector's loss of 1.56% and the S&P 500's gain of 0.89% 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. In that report, analysts expect MSFT to post earnings of $1.09 per share. This would mark year-over-year growth of 13.54%. Our most recent consensus estimate is calling for quarterly revenue of $32.46 billion, up 12.24% from the year-ago period.

MSFT's full-year Zacks Consensus Estimates are calling for earnings of $4.43 per share and revenue of $124.08 billion. These results would represent year-over-year changes of +14.18% and +12.43%, respectively.

Any recent changes to analyst estimates for MSFT should also be noted by investors. These revisions help to show the ever-changing nature of near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. 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.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Within the past 30 days, our consensus EPS projection has moved 0.42% higher. MSFT is holding a Zacks Rank of #2 (Buy) right now.

Investors should also note MSFT's current valuation metrics, including its Forward P/E ratio of 24.04. This represents a discount compared to its industry's average Forward P/E of 30.71.

It is also worth noting that MSFT currently has a PEG ratio of 1.93. 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. Computer - Software stocks are, on average, holding a PEG ratio of 2.05 based on yesterday's closing prices.

The Computer - Software industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 102, putting it in the top 40% 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.

You can find more information on all of these metrics, and much more, on Zacks.com.




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