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MicroStrategy (MSTR) Outpaces Stock Market Gains: What You Should Know

Zacks Equity Research
·3-min read

In the latest trading session, MicroStrategy (MSTR) closed at $636.54, marking a +1.33% move from the previous day. This change outpaced the S&P 500's 0.31% gain on the day. Elsewhere, the Dow gained 0.1%, while the tech-heavy Nasdaq added 0.48%.

Heading into today, shares of the business software company had lost 26.87% over the past month, lagging the Computer and Technology sector's loss of 0.76% and the S&P 500's loss of 0.04% in that time.

Investors will be hoping for strength from MicroStrategy as it approaches its next earnings release. On that day, MicroStrategy is projected to report earnings of $1.55 per share, which would represent a year-over-year decline of 25.12%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $132.45 million, up 0.86% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $6.62 per share and revenue of $508.75 million. These totals would mark changes of +28.05% and +5.83%, respectively, from last year.

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It is also important to note the recent changes to analyst estimates for MicroStrategy. Recent revisions tend to reflect the latest 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. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection remained stagnant. MicroStrategy is currently sporting a Zacks Rank of #3 (Hold).

Looking at its valuation, MicroStrategy is holding a Forward P/E ratio of 94.96. Its industry sports an average Forward P/E of 36.58, so we one might conclude that MicroStrategy is trading at a premium comparatively.

The Computer - Software industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 118, which puts it in the top 47% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. 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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