20-Year Pro Trader Reveals His "MoneyLine"
Ditch your indicators and use the "MoneyLine". A simple line tells you when to buy and sell without the guesswork. It’s a line on a chart that’s helped Nic Chahine win 83% of his options buys. Here's how he does it.
In today's fast-paced and competitive business landscape, it is essential for investors and industry enthusiasts to thoroughly analyze companies before making investment decisions. In this article, we will conduct a comprehensive industry comparison, evaluating MicroStrategy (NASDAQ:MSTR) against its key competitors in the Software industry. By examining key financial metrics, market position, and growth prospects, we aim to provide valuable insights for investors and shed light on company's performance within the industry.
MicroStrategy Background
MicroStrategy Inc is a provider of enterprise analytics and mobility software. It offers MicroStrategy Analytics platform that delivers reports and dashboards and enables users to conduct ad hoc analysis and share insights through mobile devices or the Web; MicroStrategy Server, which provides analytical processing and job management. The company's reportable operating segment is engaged in the design, development, marketing, and sales of its software platform through licensing arrangements and cloud-based subscriptions and related services.
| Company | P/E | P/B | P/S | ROE | EBITDA (in billions) | Gross Profit (in billions) | Revenue Growth |
|---|---|---|---|---|---|---|---|
| MicroStrategy Inc | 54.39 | 11.26 | 47.97 | 5.93% | $-0.04 | $0.1 | -6.09% |
| Salesforce Inc | 71.88 | 4.91 | 8.52 | 2.46% | $2.75 | $7.14 | 10.77% |
| SAP SE | 57.46 | 4.79 | 6.69 | 3.05% | $2.32 | $6.2 | 5.02% |
| Adobe Inc | 46.30 | 14.05 | 11.14 | 3.88% | $1.21 | $4.59 | 11.32% |
| Intuit Inc | 64.92 | 10.52 | 11.94 | 2.08% | $0.6 | $2.53 | 11.34% |
| Synopsys Inc | 63.52 | 13.16 | 14.57 | 7.01% | $0.53 | $1.32 | 21.15% |
| Cadence Design Systems Inc | 80.63 | 24.67 | 20.54 | 9.94% | $0.41 | $0.96 | 18.75% |
| Workday Inc | 51.48 | 8.77 | 9.80 | 16.16% | $0.24 | $1.46 | 16.75% |
| Roper Technologies Inc | 42.63 | 3.33 | 9.44 | 2.26% | $0.72 | $1.13 | 12.76% |
| Autodesk Inc | 58.40 | 28.22 | 9.62 | 16.9% | $0.35 | $1.34 | 3.89% |
| Palantir Technologies Inc | 255.11 | 14.62 | 23.71 | 2.8% | $0.11 | $0.5 | 19.61% |
| Datadog Inc | 888.29 | 20.38 | 20.47 | 2.82% | $0.07 | $0.48 | 25.62% |
| Ansys Inc | 59.60 | 5.51 | 13.15 | 5.29% | $0.37 | $0.74 | 15.99% |
| AppLovin Corp | 76.31 | 19.73 | 8.26 | 14.58% | $0.37 | $0.68 | 35.73% |
| PTC Inc | 93.58 | 7.89 | 10.17 | 2.42% | $0.16 | $0.44 | 18.09% |
| Zoom Video Communications Inc | 30.40 | 2.41 | 4.29 | 3.87% | $0.2 | $0.87 | 2.56% |
| Tyler Technologies Inc | 107.01 | 6 | 9.10 | 1.34% | $0.09 | $0.21 | 6.35% |
| NICE Ltd | 47.79 | 4.61 | 6.81 | 2.49% | $0.19 | $0.42 | 9.61% |
| Manhattan Associates Inc | 86.35 | 53.87 | 16.42 | 19.96% | $0.06 | $0.13 | 20.27% |
| Bentley Systems Inc | 49.54 | 16.68 | 13.41 | 22.81% | $0.05 | $0.24 | 8.26% |
| Average | 117.43 | 13.9 | 12.0 | 7.48% | $0.57 | $1.65 | 14.41% |
By closely examining MicroStrategy, we can identify the following trends:
The stock's Price to Earnings ratio of 54.39 is lower than the industry average by 0.46x, suggesting potential value in the eyes of market participants.
With a Price to Book ratio of 11.26, significantly falling below the industry average by 0.81x, it suggests undervaluation and the possibility of untapped growth prospects.
The stock's relatively high Price to Sales ratio of 47.97, surpassing the industry average by 4.0x, may indicate an aspect of overvaluation in terms of sales performance.
The Return on Equity (ROE) of 5.93% is 1.55% below the industry average, suggesting potential inefficiency in utilizing equity to generate profits.
The Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $-40 Million is -0.07x below the industry average, suggesting potential lower profitability or financial challenges.
With lower gross profit of $100 Million, which indicates 0.06x below the industry average, the company may experience lower revenue after accounting for production costs.
The company is witnessing a substantial decline in revenue growth, with a rate of -6.09% compared to the industry average of 14.41%, which indicates a challenging sales environment.
Debt To Equity Ratio
The debt-to-equity (D/E) ratio measures the financial leverage of a company by evaluating its debt relative to its equity.
Considering the debt-to-equity ratio in industry comparisons allows for a concise evaluation of a company's financial health and risk profile, aiding in informed decision-making.
In terms of the Debt-to-Equity ratio, MicroStrategy can be assessed by comparing it to its top 4 peers, resulting in the following observations:
Among its top 4 peers, MicroStrategy is placed in the middle with a moderate debt-to-equity ratio of 1.04.
This implies a balanced financial structure, with a reasonable proportion of debt and equity.
Key Takeaways
For MicroStrategy in the Software industry, the PE and PB ratios are low compared to peers, indicating potential undervaluation. However, the high PS ratio suggests overvaluation based on revenue. The low ROE, EBITDA, gross profit, and revenue growth further highlight underperformance compared to industry peers.
This article was generated by Benzinga's automated content engine and reviewed by an editor.
20-Year Pro Trader Reveals His "MoneyLine"
Ditch your indicators and use the "MoneyLine". A simple line tells you when to buy and sell without the guesswork. It’s a line on a chart that’s helped Nic Chahine win 83% of his options buys. Here's how he does it.
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