Zacks Research Has Strong Forecast for Microsoft Q2 Earnings

Key Points

• Zacks Research has raised its Q2 2027 earnings per share estimate for Microsoft to $4.26, slightly above the previous estimate of $4.25, with a full-year consensus estimate at $13.08 per share.
• Microsoft reported Q1 earnings of $3.65 per share, surpassing analyst expectations of $3.35, with revenues reaching $76.44 billion, reflecting an 18.1% year-over-year increase.
• The company recently announced a quarterly dividend of $0.83 per share, representing a dividend yield of 0.7% and a payout ratio of 24.34% for shareholders on record by August 21st.

Microsoft Corporation (NASDAQ:MSFT - Free Report) - Equities researchers at Zacks Research lifted their Q2 2027 EPS estimates for shares of Microsoft in a research note issued on Wednesday, August 20th. Zacks Research analyst Team now forecasts that the software giant will earn $4.26 per share for the quarter, up from their prior forecast of $4.25. The consensus estimate for Microsoft's current full-year earnings is $13.08 per share. Zacks Research also issued estimates for Microsoft's Q4 2027 earnings at $4.69 EPS.

Microsoft (NASDAQ:MSFT - Get Free Report) last issued its quarterly earnings results on Wednesday, July 30th. The software giant reported $3.65 earnings per share for the quarter, topping analysts' consensus estimates of $3.35 by $0.30. The company had revenue of $76.44 billion during the quarter, compared to analyst estimates of $73.79 billion. Microsoft had a net margin of 36.15% and a return on equity of 32.44%. The business's revenue for the quarter was up 18.1% compared to the same quarter last year. During the same period in the prior year, the business posted $2.95 EPS. Microsoft has set its Q1 2026 guidance at EPS.

Several other equities research analysts have also recently commented on the stock. Barclays boosted their price target on shares of Microsoft from $550.00 to $625.00 and gave the stock an "overweight" rating in a research report on Thursday, July 31st. Royal Bank Of Canada raised their target price on shares of Microsoft from $525.00 to $640.00 and gave the stock an "outperform" rating in a report on Thursday, July 31st. Mizuho upped their price target on Microsoft from $540.00 to $625.00 and gave the company an "outperform" rating in a report on Thursday, July 31st. Evercore ISI raised their price objective on Microsoft from $515.00 to $545.00 and gave the stock an "outperform" rating in a research note on Friday, July 25th. Finally, Wedbush lifted their target price on Microsoft from $600.00 to $625.00 and gave the stock an "outperform" rating in a report on Thursday, July 31st. One equities research analyst has rated the stock with a Strong Buy rating, twenty-nine have issued a Buy rating and two have assigned a Hold rating to the company's stock. According to MarketBeat.com, Microsoft has a consensus rating of "Moderate Buy" and an average target price of $612.54.

Microsoft Price Performance

Shares of MSFT traded down $2.97 during midday trading on Monday, reaching $504.26. The stock had a trading volume of 21,619,948 shares, compared to its average volume of 22,747,800. The company has a debt-to-equity ratio of 0.12, a current ratio of 1.35 and a quick ratio of 1.35. The company has a market capitalization of $3.75 trillion, a P/E ratio of 37.19, a P/E/G ratio of 2.22 and a beta of 1.06. The firm's 50 day moving average price is $506.08 and its 200-day moving average price is $444.52. Microsoft has a 52 week low of $344.79 and a 52 week high of $555.45.

Institutional Investors Weigh In On Microsoft

Several institutional investors have recently made changes to their positions in MSFT. WFA Asset Management Corp raised its stake in shares of Microsoft by 27.0% in the 1st quarter. WFA Asset Management Corp now owns 1,016 shares of the software giant's stock valued at $427,000 after acquiring an additional 216 shares in the last quarter. Ironwood Wealth Management LLC. grew its holdings in Microsoft by 0.3% during the second quarter. Ironwood Wealth Management LLC. now owns 12,658 shares of the software giant's stock valued at $5,658,000 after purchasing an additional 38 shares during the last quarter. Discipline Wealth Solutions LLC raised its position in shares of Microsoft by 410.4% in the third quarter. Discipline Wealth Solutions LLC now owns 2,659 shares of the software giant's stock valued at $1,144,000 after purchasing an additional 2,138 shares during the period. Wealth Group Ltd. raised its position in shares of Microsoft by 1.2% in the fourth quarter. Wealth Group Ltd. now owns 2,374 shares of the software giant's stock valued at $1,000,000 after purchasing an additional 28 shares during the period. Finally, Tallon Kerry Patrick acquired a new position in Microsoft in the 4th quarter valued at $1,375,000. 71.13% of the stock is currently owned by institutional investors and hedge funds.

Insider Transactions at Microsoft

In related news, EVP Takeshi Numoto sold 4,850 shares of Microsoft stock in a transaction on Tuesday, August 12th. The stock was sold at an average price of $527.32, for a total transaction of $2,557,502.00. Following the completion of the sale, the executive vice president owned 39,111 shares of the company's stock, valued at approximately $20,624,012.52. This trade represents a 11.03% decrease in their ownership of the stock. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is accessible through the SEC website. Insiders sold a total of 8,850 shares of company stock worth $4,406,512 over the last ninety days. 0.03% of the stock is currently owned by company insiders.

Microsoft Dividend Announcement

The company also recently disclosed a quarterly dividend, which will be paid on Thursday, September 11th. Investors of record on Thursday, August 21st will be issued a dividend of $0.83 per share. This represents a $3.32 annualized dividend and a dividend yield of 0.7%. The ex-dividend date is Thursday, August 21st. Microsoft's dividend payout ratio (DPR) is currently 24.34%.

Microsoft Company Profile

Microsoft Corporation develops and supports software, services, devices and solutions worldwide. The Productivity and Business Processes segment offers office, exchange, SharePoint, Microsoft Teams, office 365 Security and Compliance, Microsoft viva, and Microsoft 365 copilot; and office consumer services, such as Microsoft 365 consumer subscriptions, Office licensed on-premises, and other office services.