Microsoft (MSFT) Gains But Lags Market: What You Should Know

Microsoft (MSFT) closed the most recent trading day at $117.88, moving +0.19% from the previous trading session. This change lagged the S&P 500's 0.72% gain on the day. Elsewhere, the Dow gained 0.55%, while the tech-heavy Nasdaq added 0.71%.

Prior to today's trading, shares of the software maker had gained 5.44% over the past month. This has outpaced the Computer and Technology sector's gain of 2.41% and the S&P 500's gain of 0.28% in that time.

Wall Street will be looking for positivity from MSFT as it approaches its next earnings report date. On that day, MSFT is projected to report earnings of $1 per share, which would represent year-over-year growth of 5.26%. Our most recent consensus estimate is calling for quarterly revenue of $29.83 billion, up 11.24% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $4.41 per share and revenue of $123.87 billion. These totals would mark changes of +13.66% and +12.24%, respectively, from last 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 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.

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 0.14% higher. MSFT is currently sporting a Zacks Rank of #3 (Hold).

Valuation is also important, so investors should note that MSFT has a Forward P/E ratio of 26.65 right now. This valuation marks a discount compared to its industry's average Forward P/E of 29.99.

Investors should also note that MSFT has a PEG ratio of 2.16 right now. 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 was holding an average PEG ratio of 2.16 at yesterday's closing price.

The Computer - Software industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 16, putting it in the top 7% 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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