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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Microstrategy Incorporated (XNAS:MSTR) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
MSTR
Name:
MICROSTRATEGY INCORPORATED (XNAS:MSTR)
Sector:
- 172459.00K
Industry:
Software�Application
CEO:
Mr. Michael Saylor
Total Employees:
2,158
Our Technological Advancement Rating
Our Rating:
D
Technological advancement compared to industry is -98.72% lower
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF MICROSTRATEGY INCORPORATED(MSTR) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND SOFTWARE�APPLICATION INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
218.06
One Month Price Target:
$220.84
Six Month Price Target :
$234.75
Likely Price in One Year's Time:
Ticker:
$251.44
Likely Trading Range Today Under (Normal Volatility)
$216.42
Price Upper limit ($) :
$220.64
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$192.97
This week:
$161.96
This month :
$105.85
Other Primary facts
Market Cap:
2.31B
Market Cap Classification:
Mid Cap
Number of Shares
IPO Date:
11.30M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
29.16%
-25.55%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$334.40
$280.45
$101.72
$155.67
Medium risk (<10%) entry points
Buy Call
Sell Call
$262.89
Buy Put:
Sell Put:
$251.37
$173.09
$184.75
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
MSTR
Sharpe Ratio:
3.63%
Comparison:
MSTR, is amongst the top 20% stocks with highest risk-adjusted returns
Sharpe ratio is 276.88% higher than the industry
& ratio is 59.38% higher than the market/S&P 500 average
Average Returns/Yield of
MSTR
Daily returns:
0.22%
Weekly returns:
1.08%
Monthly returns:
4.32%
Yearly returns:
9.94%
Comparison of returns:
Average annual returns/yield (last 3 years) is 422.16% above industry average
Classification:
MSTR, is amongst the top 20% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.72
Statistical test of Returns:
MSTR has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
5.71%
Weekly Volatility:
12.76%
Monthly Volatility:
25.53%
Yearly Volatility:
88.42%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
1.51%
Volatility in last five trading days has been -73.46% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-11.51%
Weekly VaR:
-25.73%
Monthly VaR:
-51.46%
How Much Can the price of
MSTR
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-43%
Worst case (decline):
>85%
This translates to price declining to:
$124.25
This translates to price declining to:
$32.71
Severe Crash Probability
Risk of crash in next 6/12 months: Very high (>70%)
What is Value at Risk (VaR)?
Risk Fundamentals
MSTR is a 263.18% riskier investment compared to the market/S&P 500 & is 211.13% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is 58.79% above industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
MSTR
Beta in relation to market/S&P 500--2.28
Expected beta in 1 year's time:
1.224
Expected beta in 3 year's time:
1.732
Unlevered (debt free) Beta:
0.773
Beta in relation to Nasdaq (XNAS):
1.564
Beta in relation to all global stocks::
0.53
Beta Comparison & Analysis
Beta of competitors/peers::
1.297
Beta is 75.58% higher than peers
Average Industry Beta:
1.335
Beta is 70.57% above industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
-
-
Alpha provided | Alpha Analysis
Alpha provided:
0.331
Alpha is -1503.40% below industry average alpha yield
Alpha is 2109% higher than market/& is unsustainably high
Analysis of Cost of Capital of
MSTR
Equity cost of capital:
0.188
Equity cost of capital is 52.49% above industry mean WACC
Unlevered (without debt) cost of capital:
6.36%
Before-tax cost of debt:
0.74%
After-tax cost of debt:
0.59%
Overall debt rating:
Highest AAA investment grade
Weighted average cost of capital (WACC):
0.59%
WACC is -27.17% below industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$44.88
Revenue growth rate per share of (3Y):
2.86
Annual revenue growth rate is -86.13% below industry average
EPS:
-$54.33
Expected Annual growth rate of EPS (3Y):
0.00%
-
Free cash flow (FCF) per share:
-
-
-
Debt per share
$215.54
EBITDA per share
-$68.71
Valuation Analysis Today of
MSTR
P/E Ratio:
4500.83
P/E Ratio of Competitors/Peers:
62.24
P/E ratio is 7131.88% higher than main peers & is 2434.29% higher than the industry
-
MSTR is -102.26% undervalued if valued using industry average P/E ratio
-
-
P/S (Price to Sales ratio):
4.86
Price to sales ratio is -57.64% below the industry mean
P/B (Price to book value ratio):
2.86
-
-
Net income growth rate (3Y):
-2807.30%
Net income growth rate is -1249.71% lower than the industry average net income growth rate
Dividend Analysis
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Dividend History:
--$0.00
--$0.00
--$0.00
--$0.00
--$0.00
--$0.00
-
In-depth Debt & Leverage Analysis
Debt to equity ratio:
282.25%
Net debt to equity ratio:
271.51%
Debt to assets ratio:
66.95%
Net debt to assets ratio:
64.40%
Debt-to-asset ratio is 22.02% above industry average
Ability to repay debt:
Interest coverage ratio:
-42.88
Interest coverage ratio is -180.71% less than industry average
Looking forward:
Debt growth rate:
291.06%
Annual debt growth is -69% lower than industry average debt growth rate
Debt repayment rate in last quarter: 0.00%
Analysis of Key Statistics
Correlation of price movement with the market:
0.417
Statistical significance of correlation:
MSTR has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.503
Stock price is -17.10% less correlated with the market compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.503
Correlation of price movement with Nasdaq (^IXIC):
-0.01
Covariance of price movement with the market:
-0.035
Kurtosis
5.16
Returns have moderate fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are more probable, compared to assets with normally distributed returns
Skewness of returns:
0.347
Returns are, approximately, symmetrical
Fundamental Analysis & Dupont Analysis of
MSTR
Gross Profit Margin Ratio:
325%
Operating Profit Margin Ratio:
-152.10%
Operating profit margin is 693.76% higher than the industry
Net Profit Margin Ratio:
325%
Effective Tax Rate:
30.98%
Effective tax rate is 17.45% higher than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
-64.45%
Return on equity (ROE) is 392.78% higher than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
-15.29%
Return on assets (ROA) is 298.03% higher than the industry
Financial Leverage:
3.0x
Current Ratio:
0.81
Current ratio is -72.95% below industry average
Cash Conversion Cycle (days):
135.3
Cash conversion cycle is 42.73% above industry average
The remaining useful life of property plant & equipment is: 0.0 years
Stock based compensation to net income ratio:
-2.59%
In-depth Efficiency Analysis
Revenue generated per employee:
235.0K
Each employee generates -32% less revenue than industry average revenue per employee
EBITDA generated per employee:
- 359.8K
Each employee generates -3448% less EBITDA than industry average revenue per employee
Profit generated per employee:
- 257.7K
Each employee generates 1378% more net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
- 79.9K
Each employee generates 929% more free cash flow than industry average revenue per employee
Assets/Capital per employee
1.6M
Each employee generates 929% more free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
Research & development (R&D) investment growth rate-- 13.09%
Growth rate in R&D investment/expenditure is 756.17% higher than the industry
Competitors/Peer firms of
MSTR
NATIONAL INSTRUMENTS CORPORATION (XNAS:NATI)
CMC MATERIALS, INC. (XNAS:CCMP)
ALTAIR ENGINEERING INC. (XNAS:ALTR)
LUMINAR TECHNOLOGIES, INC. (XNAS:LAZR)
MIMECAST LIMITED (XNAS:MIME)
CRICUT, INC. (XNAS:CRCT)
BLACKLINE, INC (XNAS:BL)
SEMTECH CORPORATION (XNAS:SMTC)
Novanta Inc. (XNAS:NOVT)
Current Analyst Ratings
Strong buy�0%
Buy�4%
Hold�17%
Sell�0%
Strong sell�0%
Overall analyst sentiment is: Hold
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
507.14M
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
95.04M
412.10M
121.16M
100.48M
255.66M
155.18M
-
376.82M
-
18.11M
11.27M
- 776502.00K
- 771335.00K
- 556211.00K
- 805879.00K
- 249668.00K
- 556211.00K
Statement of Cash Flow
Date:
Period:
2.69M
Differed Income Tax :
- 57445.00K
Stock Based Compensation :
14.39M
Change in Working Capital :
40.31M
Accounts Receivables:
8.18M
Other Working Capital:
36.16M
Other Non-Cash Items:
174.49M
Net Cash Provided by Operating Activities:
43.68M
Investments in PP&E:
- 641.00K
Net Acquisitions:
-
Purchases of Investments:
-
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
3/31/22
2022
Q1
92.68M
-
92.68M
126.93M
-
27.38M
246.99M
100.32M
-
2.90B
-
377.28M
18.18M
3.39B
-
3.64B
44.39M
-
-
206.22M
54.27M
304.88M
2.44B
26.35M
2.47B
-
2.78B
20.00K
- 89309.00K
- 9552.0K
961.84M
March 31, 2022 at 6:00:00 AM
471.86M
863.00M
3.64B
-
2.44B
2.3B
-
- 215500.00K
- 216141.00K
-
-
-
-
207.29M
207.29M
- 324.00K
34.51M
98.94M
64.43M
43.68M
- 216141.00K
- 172459.00K
Our Proprietary Portfolio Rating
Our Rating:
D
Price Forecast/Expected Price in Next 5 Years of
MSTR
2023
2024
2025
2026
2027
$252.23
$290.84
$335.36
$386.69
$445.89