MicroStrategy (NASDAQ:MSTR) Shares Down 4.4% - What's Next?

MicroStrategy Incorporated (NASDAQ:MSTR) saw its shares drop by 4.4% in mid-day trading on Wednesday. The stock reached a low of $285.01 before making its last trade at $289.62. There were 22,397,611 shares exchanged during this trading session, which is an 18% increase compared to the average volume of 19,012,463 shares. The stock had closed at $302.96 prior to this decline.

Wall Street Analysts Forecast Growth

Several research firms have recently provided their insights on MicroStrategy. Canaccord Genuity Group raised its price target for the stock from $300.00 to $510.00, maintaining a "buy" rating on November 25th. BTIG Research also increased its target price from $290.00 to $570.00, similarly marking it as a "buy" on November 21st. Sanford C. Bernstein reaffirmed an "outperform" rating with a target price of $600.00, and in another report, Maxim Group adjusted their price target upward from $193.00 to $270.00 while keeping a "buy" rating. Benchmark raised its price goal from $450.00 to $650.00 and also rated the stock as a "buy" on November 25th. In summary, only one analyst has rated the stock as a sell while eight have awarded it a buy rating. As per MarketBeat, the consensus rating for the stock is "Moderate Buy" with an average price target set at $479.25.

MicroStrategy Price Performance

MicroStrategy has recorded a debt-to-equity ratio of 1.12, alongside a current ratio of 0.65 and a quick ratio of 0.65. Its fifty-day moving average price stands at $338.53 while the 200-day moving average is at $217.39. The company’s market capitalization is valued at $69.41 billion, with a price-to-earnings ratio of -137.46 and a beta value of 3.17.

The firm reported its quarterly earnings on October 30th and disclosed an earnings per share of ($1.56), which was significantly below the analysts' consensus estimate of ($0.12) by a margin of ($1.44). MicroStrategy also reported a negative return on equity of 17.31% and a staggering negative net margin of 87.05%. The company’s revenue for the quarter was reported at $116.07 million, failing to meet the expected $121.45 million. This revenue marks a decline of 10.3% compared to the same quarter last year, during which the company earned ($8.98) earnings per share.

Insider Activity at MicroStrategy

On another note, CEO Phong Le sold 1,252 shares of the company's stock on November 14th at an average selling price of $322.45, totaling $403,707.40. Post-transaction, the CEO holds 13,918 shares of MicroStrategy, estimated to be worth around $4,487,859.10, signifying an 8.25% decrease in ownership. This transaction was duly recorded in a filing with the Securities and Exchange Commission. Additionally, CAO Jeanine Montgomery sold 752 shares on the same day, also at an average price of $322.45, resulting in a total of $242,482.40. After this transaction, Montgomery owns 6,418 shares valued at approximately $2,069,484.10, which represents a 10.49% drop in ownership. In total, insiders have sold 102,000 shares worth about $32,259,177 within the last ninety days, with 13.18% of the company’s shares still owned by insiders.

Hedge Funds Weigh In On MicroStrategy

Recent activity among large investors shows increased interest in MicroStrategy. UMB Bank n.a. upped its stake in the company by 900.0% during the third quarter, now owning 150 shares of the stock valued at $25,000 after acquiring 135 additional shares. Similarly, AlphaMark Advisors LLC grew its position in MicroStrategy by 2,900.0% in the same quarter. Capital Performance Advisors LLP also invested in MicroStrategy, buying shares worth $27,000. Other investors like Sunbelt Securities Inc. and ST Germain D J Co. Inc. increased their holdings by 900.0% during the same period, bringing their shares to 160 and 170 respectively, with values around $27,000 and $29,000. Collectively, institutional and hedge fund investors own approximately 59.84% of MicroStrategy's stock.

MicroStrategy Company Profile

MicroStrategy Incorporated offers artificial intelligence-enhanced enterprise analytics software and services across the globe, including the United States, Europe, the Middle East, and Africa. Their product suite features MicroStrategy ONE, which allows non-technical users to access actionable insights directly for better decision-making. Additionally, the company provides MicroStrategy Cloud for Government, designed for ongoing threat monitoring that fulfills stringent governmental and financial requirements.

Conclusion

In light of recent market activity and analyst insights, investors may be questioning whether it's time to sell their shares in MicroStrategy. While the stock is currently rated as a "Buy," various analysts have also identified other investment opportunities that may yield better returns.

MicroStrategy, Market, Stocks, Trading