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

MicroStrategy Incorporated (NASDAQ:MSTR) saw a notable decline in its shares, dropping 4.4% during mid-day trading on Wednesday. The stock fell to a low of $285.01 before recovering slightly to close at $289.62. In total, 22,397,611 shares changed hands, marking an 18% increase in volume compared to the average trading session of 19,012,463 shares. The previous close for the stock was $302.96.

Wall Street Analysts Forecast Growth

Despite the recent drop, several analysts remain optimistic about MicroStrategy's future. Canaccord Genuity raised its price target from $300 to $510, maintaining a "buy" rating. Similarly, BTIG Research increased its target from $290 to an impressive $570 while also rating the stock as a "buy." Remaining upbeat, Sanford C. Bernstein issued an "outperform" rating with a $600 target. Other analysts, such as Maxim Group and Benchmark, have followed suit, with price targets set at $270 and $650, respectively. Currently, one analyst has a sell rating, but eight others recommend purchasing the stock. MarketBeat reports a consensus rating of "Moderate Buy" with an average price target of $479.25.

MicroStrategy Price Performance

Examining the company’s financial health reveals a debt-to-equity ratio of 1.12, alongside a current and quick ratio of 0.65. The stock's fifty-day moving average stands at $338.53, while the 200-day moving average is $217.39. With a market capitalization of $69.41 billion, the stock carries a P/E ratio of -137.46 and a beta of 3.17, indicating it may be more volatile than the market overall.

Recent Earnings Results

MicroStrategy recently reported its quarterly earnings on October 30, revealing an EPS of -$1.56. This figure missed analysts' expectations of -$0.12 by a significant margin of $1.44. The company also indicated a negative return on equity of 17.31% and a concerning net margin of 87.05%. Revenue for the quarter totaled $116.07 million, falling short of the $121.45 million consensus estimate, representing a decline of 10.3% year-over-year.

Insider Activity at MicroStrategy

In terms of insider trading, CEO Phong Le sold 1,252 shares on November 14 at an average price of $322.45. This sale amounted to $403,707.40, leading to an 8.25% reduction in his ownership. Additionally, CAO Jeanine Montgomery sold 752 shares under similar conditions, resulting in a 10.49% decrease in her holdings. In the last ninety days, insiders have sold around 102,000 shares valued at approximately $32.26 million. Overall, insiders hold 13.18% of MicroStrategy's stock.

Hedge Funds' Influence on MicroStrategy

There has been notable activity from large institutional investors in MicroStrategy’s stock. UMB Bank n.a. significantly increased its stake by 900% in the last quarter, now holding 150 shares valued at $25,000 after acquiring an additional 135 shares. Other investors, like AlphaMark Advisors and Sunbelt Securities, have also ramped up their positions by 2,900% and 900%, respectively. Overall, institutional investors hold about 59.84% of MicroStrategy's stock.

About MicroStrategy

MicroStrategy Incorporated specializes in providing artificial intelligence-powered analytics software and related services across multiple regions, including the U.S., Europe, and Asia. The company’s flagship offerings include MicroStrategy ONE, which enables users to gain actionable insights efficiently, and MicroStrategy Cloud for Government, designed to meet strict security requirements for governmental and financial organizations.

MicroStrategy, Stocks, Finance