In the latest trading session, Microsoft (MSFT - Free Report) closed at $154.69, marking a -0.54% move from the previous day. This change lagged the S&P 500's 0.03% gain on the day. Meanwhile, the Dow gained 0.11%, and the Nasdaq, a tech-heavy index, added 0.1%.
Coming into today, shares of the software maker had gained 3.45% in the past month. In that same time, the Computer and Technology sector gained 2.71%, while the S&P 500 gained 1.82%.
Investors will be hoping for strength from MSFT as it approaches its next earnings release. On that day, MSFT is projected to report earnings of $1.32 per share, which would represent year-over-year growth of 20%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $35.70 billion, up 9.96% from the year-ago period.
Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $5.35 per share and revenue of $140.11 billion. These totals would mark changes of +12.63% and +11.34%, respectively, from last year.
Investors might also notice 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.
Our research shows that these estimate changes are directly correlated with near-term stock prices. 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, 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. Over the past month, the Zacks Consensus EPS estimate has moved 0.11% higher. MSFT currently has a Zacks Rank of #2 (Buy).
In terms of valuation, MSFT is currently trading at a Forward P/E ratio of 29.06. Its industry sports an average Forward P/E of 31.53, so we one might conclude that MSFT is trading at a discount comparatively.
It is also worth noting that MSFT currently has a PEG ratio of 2.44. 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 2.27 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 73, which puts it in the top 29% 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.