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MSTR

MicroStrategy NasdaqGS:MSTR Stock Report

Last Price

US$325.20

Market Cap

US$3.7b

7D

-3.2%

1Y

-50.4%

Updated

17 Aug, 2022

Data

Company Financials +
MSTR fundamental analysis
Snowflake Score
Valuation2/6
Future Growth0/6
Past Performance0/6
Financial Health0/6
Dividends0/6

MSTR Stock Overview

MicroStrategy Incorporated provides enterprise analytics software and services worldwide.

MicroStrategy Competitors

Price History & Performance

Summary of all time highs, changes and price drops for MicroStrategy
Historical stock prices
Current Share PriceUS$325.20
52 Week HighUS$891.38
52 Week LowUS$134.09
Beta2.24
1 Month Change44.13%
3 Month Change54.29%
1 Year Change-50.36%
3 Year Change130.82%
5 Year Change158.83%
Change since IPO207.88%

Recent News & Updates

Aug 16

A Q&A With Dan Weiskopf On Saylor And MicroStrategy

People were talking about Bitcoin going to $13,000, then it stabilized at $20,000 or maybe it hit bottom at $17,000. Bitcoin is about supply and demand, and Saylor is trying to create the demand and validate that demand and that need, to drive the utility value of Bitcoin. Slayor said, my mandate is twofold. One to see the software business grow. And then secondly, to work on the Bitcoin asset. I’m not going to deviate from my mandate. Evan Harp speaks with Dan Weiskopf, Portfolio Manager at Toroso Investments and CO-PM of the Amplify Transformational Data Sharing ETF (BLOK) to discuss Michael Saylor stepping down as CEO of MicroStrategy (MSTR) and what it means for the company and the broader crypto space. Evan Harp: At a high level, what does Michael Saylor’s exit mean for MicroStrategy, and what can expect under Phong Le’s stewardship? Dan Weiskopf: Well, take a step back. Saylor didn’t exit a MicroStrategy, right? He’s just changing title. It’s not like he sold his 2 million shares, He’s been the CEO – And I’m not trying to get too nitty gritty, but he’s still the largest shareholder by far with control and class shares. I would argue that he’s taking the step back to free up time more than anything else. I sat down with him back in January and he’s pretty open about it, about – not that he was going to step down, but he was open that he really needed to make a critical decision years ago because he was building up his cash. That’s great, but only if you’re getting credit for that cash and he wasn’t getting any credit for it. Which forces an entrepreneurial CEO to think things through. What do I do with the cash? What do I do with my position in the marketplace? Should I make a big acquisition or make tuck-in acquisitions? I think he came to the conclusion as an operator that he didn’t want to make a large acquisition within the context of the software business. The reason why that is, is because he was up against the Oracles and the Microsofts and SAPs – and he couldn’t outbid them. Whatever he would buy would get marginalized. I don’t think that, frankly, people give him the full credit for really managing risk and not being an aggressive acquirer. Instead what he’s done, is he’s found the right managers to, in his mind, manage the business better than he has been. If and if you look at MicroStrategy’s growth, candidly, it just hasn’t been growing for years. Evan Harp: The day he stepped down as CEO it went up something like 15%. To what extent though, do you think that bump was buoyed by the recent Bitcoin surge? What do you make of that? Dan Weiskopf: Yeah. My last point on it is the CFO is relatively new and the CEO has been around but is also relatively new. So he’s brought the team in that he feels confident about. I think that it was definitely crypto/Bitcoin-driven, why the stock went up. The stock also has a mammoth short position. The problem with these shorts is that when bitcoin is going down, it looks like it’s going to go down forever and the shorts feel super happy and super confident. People were talking about Bitcoin going to $13,000, then it stabilized at $20,000 or maybe it hit bottom at $17,000. But then it started moving up again. Now the shorts are afraid that it might be going higher. Let’s take a step back. It may not even be in their purview and making the decision to cover. It may be somebody else’s. It’s, you know, the short interest in MicroStrategy is, like, 36% of the flow. That’s huge, right? Evan Harp: Yeah, that’s pretty huge. To pivot a bit, I’d love to hear your take on the $917 million impairment charge and how that may have factored in Saylor’s decision to step down as CEO – or if it even factored in at all. Dan Weiskopf: I don’t think it factored in at all. It’s an accounting adjustment, which cannot be a surprise to anybody unless they’re clueless that a charge was coming. It is stated, as a fact, currently, that that’s the way things have to be accounted for with Bitcoin, right? So, the board was completely aligned with him making the decision him being actually the board making the decision to take the action that they did and, and take the cash flow and invest it in Bitcoin. The accounting is being reviewed, by the way, by the FSB and maybe at some point, will be a more marked market, but they are just not clear at this point and looking for guidance. Let’s just take a step back and remember that he owns 2 million shares. He is not walking away. He has been CEO for 32 years. So, stepping back, you also have to appreciate at the end of the day, at its peak, I think MicroStrategy may have been worth $700 million in market cap value, maybe a billion. The Bitcoin value just going 130,000 times 24,000 is $3 billion. You know, you tell me where one should spend your energy if you’re the largest shareholder of MicroStrategy? Evan Harp: That makes a lot of sense. MicroStrategy is very bullish on Bitcoin. What does that mean at this particular moment? Bitcoin just had this big drawdown, you’ve got the recent surge, and you have companies like Tesla that have been offloading a lot of their Bitcoin. All of this is creating these conflicting narratives. Dan Weiskopf: We’re looking at entrepreneurial CEOs in the technology world as reviewing Bitcoin as an option when they have excess cash. We think that’s a possibility. Clearly, Saylor was the first to do it. But, let’s be honest, it requires a great deal of conviction. I think everybody has to be an admirer of Elon Musk for what he’s accomplished. But… He isn’t the most consistent CEO out there. Him waffling on Bitcoin doesn’t really surprise me. Then the question becomes, who else might step up and take the kind of position that Saylor has taken? It’s harder to do it when you’re the CEO, as an entrepreneur, who’s down billions of dollars, to your point, on the write down, right? Yeah, you’re not feeling so smart. Although I don’t think that he waffles very much at all. Because he’s adamant regardless. So I guess my answer to you is Elon Musk sold. What did it prove? It proved that you can turn around and sell Bitcoin on a massive scale if you’re panicking, which he did. I mean, he did. He sold during the crisis. Maybe he still has two or three million. I don’t know. Because we’ll find out later. Evan Harp: When people are putting up think pieces or talking about this story, what is something that, in your view, not enough people are considering? Dan Weiskopf: I think what is not necessarily appreciated is that he has been the CEO for 32 years. I think he was the longest-running active CEO/entrepreneur as a controlling shareholder. That doesn’t come around very often. I think what people underestimate is I think he’s worked very, very closely with his board and the other members of the management team to do it the right way. To do this the wrong way is an invitation for lawsuits. I think he really telegraphed what his intentions were when he started to buy bitcoin. He owned it himself before MicroStrategy bought it. He had to get comfortable himself with the volatility and the trend and analysis that he had done. Then he went to the board and laid out his plan. I also don’t think that people fully appreciate the structure that they took to manage the risk associated with owning Bitcoin. They’ve done it in stages. When they borrowed, they borrowed very carefully. All the rumors about a margin call, I think, were the shorts providing misinformation. Well, clearly it was because it didn’t happen. He graduated from MIT, pretty smart guy, an engineering background – maybe he knows how to do the math? Evan Harp: Does his role change make you more or less bullish on MicroStrategy? Or, or maybe about the same level you were at before? Dan Weiskopf: It doesn’t change our outlook on MicroStrategy. At all. He probably has more free time to focus his energy to have a positive influence on the price of Bitcoin, and arguably walk through how to do it the right way with other CEOs and other folks who are interested in bitcoin. I think it’s way too underappreciated, frankly, that, here you have a billionaire who’s taking this massive risk and buying Bitcoin. Why is he doing that? Is it just to make more money? Or is it to make a statement that things need to change? I think he views Bitcoin as a technology as much as anything else. Having said that, he would tell me that I’m wrong, it’s a store of value. Evan Harp: Just thinking in terms of something you said, every community has personalities and leaders and spokespeople, but do you agree that the crypto space, compared to other types of spaces or corners of the market, relies more on its personalities and big names? What do you see as Saylor’s role in the Bitcoin community going forward compared to what it might have been when he was a CEO? Dan Weiskopf: So a couple of things. Yeah, he must spend a crazy amount of time promoting the interests of the Bitcoin community. I asked him, at one point, whether it was really altruistic in that – I think here in the US, it’s underappreciated the challenge of transferring money, right? In the emerging markets, it’s really difficult. Bitcoin is just definitely changing people’s lives. I think the other thing is he’s always been very much about education. That’s why he’s got the Saylor.org organization that gives away money to educate people. I don’t know if it gives away money, but helps to educate people, just generally get accredited education. Where I’m going on all this is that I think if he wasn’t the one, and the Winklevoss people weren’t the one – or two in their case, because they’re twins, we would need somebody else. So long as he’s there it really helps because he’s so consistent with his messaging. He’s an evangelist, and his message does not change, which is really, really hard. At the end of the day, bitcoin is about supply and demand, and he’s trying to create the demand and validate that demand and that need, to drive the utility value of Bitcoin, which he sees as paramount. Evan Harp: What do you see happening in the second half of the year for the crypto space in general? Dan Weiskopf: My hope is that Bitcoin has bottomed, and if bitcoin has bottomed the trend will move positively for the price. Which would mean that it would challenge $25,000 which means that it’s going to challenge $30,000 and then people are again going to get super excited because everybody likes to work with large numbers and the excitement will come back.

Aug 08
Capital Allocation Trends At MicroStrategy (NASDAQ:MSTR) Aren't Ideal

Capital Allocation Trends At MicroStrategy (NASDAQ:MSTR) Aren't Ideal

To find a multi-bagger stock, what are the underlying trends we should look for in a business? Firstly, we'll want to...

Aug 04

MicroStrategy: Saylor Stepping Down As CEO Is A Big Positive, But Not Big Enough

Core still just limping along. Michael Saylor steps down as CEO but remains Chairman and controlling shareholder. Complacent and Compliant Board of Directors not changing. Debt load still a major liability. The Quarter: MicroStrategy (MSTR) reported another ho-hum operational quarter. Its core operating software business saw revenues decline 3% YOY (year over year) and grow 2% in constant currency. The company continues to highlight its subscription services revenue, which grew a much more exciting 40% YOY in constant currency. The problem is that this business is only $14 million of revenue, a tiny 11.5% of total sales. You can see the positives the company pushed to the forefront in the presentation slide below. Q2 MicroStrategy Partial Sales Breakdown (Q2 Company Presentation) Despite highlighting the positives embedded within revenue, costs are an uglier picture. Operating costs including cost of revenues, sales and marketing, R&D and G&A grew from $104 million to $107 million. There is no real currency adjustment to those. So even in the best-case scenario and adjusting revenue to constant currency, the company's core operations declined in profit. This fact leads me to my core view on this company: as a standalone software business, this company is stagnant and mediocre at best and worth only a few hundred million in the most bullish scenario. The Bitcoin Story and Saylor Resignation: As anyone who has followed this company knows, newly former CEO and still Chairman and largest shareholder Michael Saylor has invested heavily in Bitcoin (BTC-USD) since the summer of 2020. The company owned 129,699 bitcoins at an average cost of $30,664 as of June 30, a total investment of $3.977 billion funding through the company's original $500 million cash balance, its cash flow, $1 billion of new class A shares, and the addition of $2.4 billion of secured and unsecured debt. The decline in Bitcoin during the quarter led to a $918 million digital impairment during the quarter, which shouldn't surprise anyone. The surprise to the market was CEO Michael Saylor's resignation as CEO. He will now be executive chairman. Neither the company nor Saylor tied his resignation to the Bitcoin loss. The comment from Saylor was, "I believe that splitting the roles of Chairman and CEO will enable us to better pursue our two corporate strategies of acquiring and holding bitcoin and growing our enterprise analytics software business. As Executive Chairman, I will be able to focus more on our bitcoin acquisition strategy and related bitcoin advocacy initiatives, while Phong [Le] will be empowered as CEO to manage overall corporate operations." The market is viewing the Saylor resignation as a major positive. As of this writing (afternoon of August 2), the stock is up 14% even though Bitcoin is only up 1%. I am less sanguine. Saylor's resignation poses a few questions. The biggest in my mind is what actually changes at the company? I find it hard to believe Phong Le stepping up from President to CEO will change the trajectory of the moribund software business. Michael Saylor remains as Executive Chairman which means an active, operating role, and also still owns over 1.9 million supervoting Class B shares, or 67.7% of the voting power. Moreover, the Board of Directors, who signed off on the Bitcoin expedition, is not changing at all. That all adds up to just Saylor stepping down as CEO as mostly cosmetic in nature. Valuation: It always comes back to valuation. Two years ago, right before the Bitcoin investment, MSTR had the following valuation (As of June 30, 2020). Market Cap (9.7mm shares at $118) $1.150 billion Debt $0 Cash and Short-Term Investments $532 million Enterprise Value $618 million EV/TTM EBITDA ($119 million) 5.19x EV/Sales ($475 million) 1.3x

Shareholder Returns

MSTRUS SoftwareUS Market
7D-3.2%-0.6%1.1%
1Y-50.4%-15.3%-9.0%

Return vs Industry: MSTR underperformed the US Software industry which returned -14.6% over the past year.

Return vs Market: MSTR underperformed the US Market which returned -8.9% over the past year.

Price Volatility

Is MSTR's price volatile compared to industry and market?
MSTR volatility
MSTR Average Weekly Movement17.2%
Software Industry Average Movement10.2%
Market Average Movement7.6%
10% most volatile stocks in US Market17.0%
10% least volatile stocks in US Market3.1%

Stable Share Price: MSTR is more volatile than 90% of US stocks over the past 3 months, typically moving +/- 17% a week.

Volatility Over Time: MSTR's weekly volatility (17%) has been stable over the past year, but is still higher than 75% of US stocks.

About the Company

FoundedEmployeesCEOWebsite
19892,158Phong Lehttps://www.microstrategy.com

MicroStrategy Incorporated provides enterprise analytics software and services worldwide. It offers MicroStrategy, an enterprise platform, which provides a modern analytics experience by delivering insights across multiple devices to users via hyperintelligence products, visualization and reporting capabilities, mobility features, and custom applications developed on the platform; analysts and data scientists with seamless access to trusted, governed data directly within their tools; and APIs and gateways, multiple deployment options, enterprise semantic graph, scalability, and security. The company also provides MicroStrategy Support that helps customers to achieve their system availability and uptime goals, and to improve the overall experience through highly responsive troubleshooting and proactive technical product support.

MicroStrategy Fundamentals Summary

How do MicroStrategy's earnings and revenue compare to its market cap?
MSTR fundamental statistics
Market CapUS$3.68b
Earnings (TTM)-US$1.32b
Revenue (TTM)US$503.86m

7.3x

P/S Ratio

-2.8x

P/E Ratio

Earnings & Revenue

Key profitability statistics from the latest earnings report
MSTR income statement (TTM)
RevenueUS$503.86m
Cost of RevenueUS$97.20m
Gross ProfitUS$406.66m
Other ExpensesUS$1.73b
Earnings-US$1.32b

Last Reported Earnings

Jun 30, 2022

Next Earnings Date

n/a

Earnings per share (EPS)-116.73
Gross Margin80.71%
Net Profit Margin-261.81%
Debt/Equity Ratio-1,269.5%

How did MSTR perform over the long term?

See historical performance and comparison
We’ve recently updated our valuation analysis.

Valuation

Is MSTR undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

2/6

Valuation Score 2/6

  • Price-To-Sales vs Peers

  • Price-To-Sales vs Industry

  • Price-To-Sales vs Fair Ratio

  • Below Fair Value

  • Significantly Below Fair Value

  • Analyst Forecast

Key Valuation Metric

Which metric is best to use when looking at relative valuation for MSTR?

Other financial metrics that can be useful for relative valuation.

MSTR key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue12x
Enterprise Value/EBITDA174.9x
PEG Ration/a

Price to Sales Ratio vs Peers

How does MSTR's PS Ratio compare to its peers?

MSTR PS Ratio vs Peers
The above table shows the PS ratio for MSTR vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
CompanyPSEstimated GrowthMarket Cap
Peer Average10.9x
NCNO nCino
12.3x24.7%US$3.8b
ESMT EngageSmart
13.5x26.1%US$3.5b
CWAN Clearwater Analytics Holdings
10.6x17.1%US$3.8b
YOU Clear Secure
7.2x21.1%US$4.5b
MSTR MicroStrategy
7.3x4.6%US$3.7b

Price-To-Sales vs Peers: MSTR is good value based on its Price-To-Sales Ratio (7.3x) compared to the peer average (10.9x).


Price to Earnings Ratio vs Industry

How does MSTR's PE Ratio compare vs other companies in the US Software Industry?

Price-To-Sales vs Industry: MSTR is expensive based on its Price-To-Sales Ratio (7.3x) compared to the US Software industry average (5.3x)


Price to Sales Ratio vs Fair Ratio

What is MSTR's PS Ratio compared to its Fair PS Ratio? This is the expected PS Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

MSTR PS Ratio vs Fair Ratio.
Fair Ratio
Current PS Ratio7.3x
Fair PS Ratio5.7x

Price-To-Sales vs Fair Ratio: MSTR is expensive based on its Price-To-Sales Ratio (7.3x) compared to the estimated Fair Price-To-Sales Ratio (5.7x).


Share Price vs Fair Value

What is the Fair Price of MSTR when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: MSTR ($325.2) is trading below our estimate of fair value ($343.92)

Significantly Below Fair Value: MSTR is trading below fair value, but not by a significant amount.


Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

Analyst Forecast: Target price is more than 20% higher than the current share price, but analysts are not within a statistically confident range of agreement.


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Future Growth

How is MicroStrategy forecast to perform in the next 1 to 3 years based on estimates from 4 analysts?

Future Growth Score

0/6

Future Growth Score 0/6

  • Earnings vs Savings Rate

  • Earnings vs Market

  • High Growth Earnings

  • Revenue vs Market

  • High Growth Revenue

  • Future ROE


109.4%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: MSTR is forecast to remain unprofitable over the next 3 years.

Earnings vs Market: MSTR is forecast to remain unprofitable over the next 3 years.

High Growth Earnings: MSTR is forecast to remain unprofitable over the next 3 years.

Revenue vs Market: MSTR's revenue (4.6% per year) is forecast to grow slower than the US market (7.9% per year).

High Growth Revenue: MSTR's revenue (4.6% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: Insufficient data to determine if MSTR's Return on Equity is forecast to be high in 3 years time


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Past Performance

How has MicroStrategy performed over the past 5 years?

Past Performance Score

0/6

Past Performance Score 0/6

  • Quality Earnings

  • Growing Profit Margin

  • Earnings Trend

  • Accelerating Growth

  • Earnings vs Industry

  • High ROE


-87.9%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: MSTR is currently unprofitable.

Growing Profit Margin: MSTR is currently unprofitable.


Past Earnings Growth Analysis

Earnings Trend: MSTR is unprofitable, and losses have increased over the past 5 years at a rate of 87.9% per year.

Accelerating Growth: Unable to compare MSTR's earnings growth over the past year to its 5-year average as it is currently unprofitable

Earnings vs Industry: MSTR is unprofitable, making it difficult to compare its past year earnings growth to the Software industry (18.7%).


Return on Equity

High ROE: MSTR's liabilities exceed its assets, so it is difficult to calculate its Return on Equity.


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Financial Health

How is MicroStrategy's financial position?

Financial Health Score

0/6

Financial Health Score 0/6

  • Short Term Liabilities

  • Long Term Liabilities

  • Debt Level

  • Reducing Debt

  • Stable Cash Runway

  • Forecast Cash Runway

Financial Position Analysis

Short Term Liabilities: MSTR has negative shareholder equity, which is a more serious situation than short term assets not covering short term liabilities.

Long Term Liabilities: MSTR has negative shareholder equity, which is a more serious situation than short term assets not covering long term liabilities.


Debt to Equity History and Analysis

Debt Level: MSTR has negative shareholder equity, which is a more serious situation than a high debt level.

Reducing Debt: MSTR's has negative shareholder equity, so we do not need to check if its debt has reduced over time.


Balance Sheet


Cash Runway Analysis

For companies that have on average been loss making in the past we assess whether they have at least 1 year of cash runway.

Stable Cash Runway: MSTR has less than a year of cash runway based on its current free cash flow.

Forecast Cash Runway: Insufficient data to determine if MSTR has enough cash runway if its free cash flow continues to grow or shrink based on historical rates.


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Dividend

What is MicroStrategy current dividend yield, its reliability and sustainability?

Dividend Score

0/6

Dividend Score 0/6

  • Notable Dividend

  • High Dividend

  • Stable Dividend

  • Growing Dividend

  • Earnings Coverage

  • Cash Flow Coverage

Dividend Yield vs Market

Notable Dividend: Unable to evaluate MSTR's dividend yield against the bottom 25% of dividend payers, as the company has not reported any recent payouts.

High Dividend: Unable to evaluate MSTR's dividend yield against the top 25% of dividend payers, as the company has not reported any recent payouts.


Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if MSTR's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if MSTR's dividend payments have been increasing.


Earnings Payout to Shareholders

Earnings Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.


Cash Payout to Shareholders

Cash Flow Coverage: Unable to calculate sustainability of dividends as MSTR has not reported any payouts.


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Management

How experienced are the management team and are they aligned to shareholders interests?

2.1yrs

Average management tenure


CEO

Phong Le (45 yo)

2.08yrs

Tenure

US$18,718,584

Compensation

Mr. Phong Q. Le serves as President of MicroStrategy Incorporated since July 6, 2020 and served as its Chief Financial Officer since April 23, 2020 until May 09, 2022. Mr. Le serves as Chief Executive Offi...


CEO Compensation Analysis

Compensation vs Market: Phong's total compensation ($USD18.72M) is above average for companies of similar size in the US market ($USD6.57M).

Compensation vs Earnings: Phong's compensation has increased whilst the company is unprofitable.


Leadership Team

Experienced Management: MSTR's management team is considered experienced (2.1 years average tenure).


Board Members

Experienced Board: MSTR's board of directors are seasoned and experienced ( 17.8 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: MSTR insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 15.9%.


Top Shareholders

Company Information

MicroStrategy Incorporated's employee growth, exchange listings and data sources


Key Information

  • Name: MicroStrategy Incorporated
  • Ticker: MSTR
  • Exchange: NasdaqGS
  • Founded: 1989
  • Industry: Application Software
  • Sector: Software
  • Implied Market Cap: US$3.675b
  • Shares outstanding: 11.30m
  • Website: https://www.microstrategy.com

Number of Employees


Location

  • MicroStrategy Incorporated
  • 1850 Towers Crescent Plaza
  • Tysons Corner
  • Virginia
  • 22182
  • United States

Listings


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2022/08/17 00:00
End of Day Share Price2022/08/17 00:00
Earnings2022/06/30
Annual Earnings2021/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.