The firm said it raised its rating for the global provider of enterprise software platforms for business intelligence due to improvements in visibility and management communication.
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TheStreet Ratings team rates MICROSTRATEGY INC as a Hold with a ratings score of C+. TheStreet Ratings Team has this to say about their recommendation:
"We rate MICROSTRATEGY INC (MSTR) a HOLD. The primary factors that have impacted our rating are mixed some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, compelling growth in net income and revenue growth. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity and relatively poor performance when compared with the S&P 500 during the past year."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- MICROSTRATEGY INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, MICROSTRATEGY INC increased its bottom line by earning $2.35 versus $2.00 in the prior year. This year, the market expects an improvement in earnings ($2.45 versus $2.35).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Software industry. The net income increased by 96.0% when compared to the same quarter one year prior, rising from $8.24 million to $16.15 million.
- The gross profit margin for MICROSTRATEGY INC is currently very high, coming in at 84.21%. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, MSTR's net profit margin of 9.73% significantly trails the industry average.
- In its most recent trading session, MSTR has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. Looking ahead, the stock's rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry, implying reduced upside potential.
- The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. When compared to other companies in the Software industry and the overall market, MICROSTRATEGY INC's return on equity is below that of both the industry average and the S&P 500.
- You can view the full analysis from the report here: MSTR Ratings Report