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Microsoft (MSFT) Dips More Than Broader Markets: What You Should Know

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Microsoft (MSFT - Free Report) closed at $163.49 in the latest trading session, marking a -1.08% move from the prior day. This move lagged the S&P 500's daily loss of 0.16%. At the same time, the Dow lost 0.12%, and the tech-heavy Nasdaq lost 0.33%.

Coming into today, shares of the software maker had gained 9.73% in the past month. In that same time, the Computer and Technology sector lost 7.54%, while the S&P 500 lost 10.5%.

Wall Street will be looking for positivity from MSFT as it approaches its next earnings report date. In that report, analysts expect MSFT to post earnings of $1.28 per share. This would mark year-over-year growth of 12.28%. Our most recent consensus estimate is calling for quarterly revenue of $33.96 billion, up 11.08% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $5.58 per share and revenue of $140.49 billion, which would represent changes of +17.47% and +11.64%, respectively, from the prior year.

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 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. 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 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. The Zacks Consensus EPS estimate has moved 0.64% lower within the past month. MSFT is currently sporting a Zacks Rank of #3 (Hold).

Looking at its valuation, MSFT is holding a Forward P/E ratio of 29.6. This valuation marks a premium compared to its industry's average Forward P/E of 26.02.

Meanwhile, MSFT's PEG ratio is currently 2.28. 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. Computer - Software stocks are, on average, holding a PEG ratio of 2.29 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 54, putting it in the top 22% 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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