MicroStrategy Earnings Preview

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If MicroStrategy (NAS: MSTR) misses estimates again it will be the third consecutive quarter for the company. The company will unveil its latest earnings on Wednesday, Nov. 9. MicroStrategy is a provider of business intelligence software.

What analysts say:

  • Buy, sell, or hold?: Analysts think investors should stand pat on MicroStrategy with four of seven analysts rating it hold. Analysts don't like MicroStrategy as much as competitor Pegasystems overall. Four out of seven analysts rate Pegasystems a buy compared to one of seven for MicroStrategy.
  • Revenue forecasts: On average, analysts predict $160 million in revenue this quarter. That would represent a rise of 15% from the year-ago quarter.
  • Wall Street earnings expectations: The average analyst estimate is earnings of $1.13 per share. Estimates range from $0.67 cents to $1.68.

What our community says:
CAPS All-Stars are solidly behind the stock with 82.1% assigning it an "outperform" rating. The community at large concurs with the All-Stars with 85% giving it a rating of "outperform." Fools are gung-ho about MicroStrategy, though the message boards have been quiet lately with only 73 posts in the past 30 days. Despite the majority sentiment in favor of MicroStrategy, the stock has a middling CAPS rating of three out of five stars.

Management:
MicroStrategy's income has fallen year over year by an average of 59.3% over the past five quarters. The company's gross margin shrank by 2.4 percentage points in the last quarter. Revenue rose 28.5% while cost of sales rose 41.9% to $34.5 million from a year earlier.

Now let's look at how efficient management is at running the business. Traditionally, margins represent the efficiency with which companies capture portions of sales dollars. The following table shows gross, operating, and net margins over the past four quarters.

Quarter

Q2

Q1

Q4

Q3

Gross Margin

75.0%

72.8%

76.4%

76.2%

Operating Margin

2.5%

0.9%

13.6%

8.6%

Net Margin

2.1%

0.9%

12.9%

6.4%

One final thing: If you want to keep tabs on MicroStrategy movements, and for more analysis on the company, make sure you add it to your Watchlist.

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At the time this article was published

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