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

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


Microsoft (MSFT) closed the most recent trading day at $103.29, moving -0.54% from the previous trading session. This change lagged the S&P 500's daily gain of 1.29%. Elsewhere, the Dow gained 1.55%, while the tech-heavy Nasdaq added 1.27%.

Investors will be hoping for strength from MSFT as it approaches its next earnings release, which is expected to be January 30, 2019. The company is expected to report EPS of $1.09, up 13.54% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $32.30 billion, up 11.69% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $4.39 per share and revenue of $123.41 billion, which would represent changes of +13.14% and +11.83%, respectively, from the prior year.

It is also important to note the recent changes to analyst estimates for MSFT. These revisions typically reflect the latest short-term business trends, which can change frequently. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. 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 3.32% higher. MSFT is currently sporting a Zacks Rank of #2 (Buy).

Looking at its valuation, MSFT is holding a Forward P/E ratio of 23.67. This represents a discount compared to its industry's average Forward P/E of 38.32.

It is also worth noting that MSFT currently has a PEG ratio of 1.9. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Computer – Software was holding an average PEG ratio of 2.63 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 103, 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.

Make sure to utilize Zacks. Com to follow all of these stock-moving metrics, and more, in the coming trading sessions.

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