Microsoft (MSFT) closed the last trading day at $413.64, moving -1.96% from the previous trading session. The change trailed the S&P 500’s 1.2% loss on the day. Meanwhile, the Dow lost 0.65% and the tech-rich Nasdaq lost 1.79%.
Shares of the software maker have gained 1.32% in the past month, leading the Computer & Technology sector’s loss of 0.51% and the S&P 500’s loss of 0.85%.
Analysts and investors alike will be closely watching Microsoft’s performance in the upcoming earnings release. The company’s earnings report is scheduled to be publicly announced on April 25, 2024. The company is forecast to report EPS of $2.81, up 14.69% from the same quarter last year. At the same time, our latest consensus estimate calls for revenue of $60.63 billion, reflecting growth of 14.71% over the same quarter last year.
For the full year, Zacks Consensus Estimates forecast earnings of $11.61 per share and revenue of $243.54 billion, indicating year-over-year changes of +18.35% and +14.92%, respectively.
Investors should also pay attention to any recent changes in analyst estimates for Microsoft. These latest adjustments often reflect the changing dynamics of short-term business patterns. Therefore, positive estimate revisions express analysts’ confidence in the company’s business performance and profit potential.
Empirical research shows that these revisions in valuations are directly correlated with future stock price performance. To benefit from this, we developed Zacks Rank, a proprietary model that takes these valuation changes into account and provides an effective rating system.
The Zacks Ranking System, which runs from #1 (Strong Buy) to #5 (Strong Sell), boasts an impressive track record of externally audited outperformance, with #1 ranked stocks delivering an average annual return of +25% since 1988. The Zacks Consensus EPS Estimate decreased by 0.18% over the past month. Microsoft currently holds a Zacks Rank #3 (Hold).
In terms of valuation, Microsoft is currently trading at a Forward P/E ratio of 36.34. This represents a premium compared to its industry average Forward P/E of 29.97.
Meanwhile, MSFT’s PEG ratio currently stands at 2.25. Comparable to the generally accepted P/E ratio, the PEG ratio is also responsible for a company’s projected earnings growth. Computer and software stocks average a PEG ratio of 2.25 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 82, which places it in the top 33% of all 250+ industries.
The Zacks Industry Rank measures the strength of our individual industry groups by measuring the average Zacks Rank of individual stocks within the groups. Our research shows that the top 50% of industries outperform the bottom half by a factor of 2 to 1.
You can find more information on all of these metrics and more at Zacks.com.
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