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 the dynamic and cutthroat world of business, conducting thorough company analysis is essential for investors and industry experts. In this article, we will undertake a comprehensive industry comparison, evaluating MicroStrategy (NASDAQ:MSTR) and its primary competitors in the Software industry. By closely examining key financial metrics, market position, and growth prospects, our aim is 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 | 44.49 | 9.58 | 39.24 | 5.93% | $-0.04 | $0.1 | -6.09% |
| Salesforce Inc | 64.37 | 4.40 | 7.63 | 2.46% | $2.75 | $7.14 | 10.77% |
| Adobe Inc | 44.42 | 13.48 | 10.68 | 3.88% | $1.21 | $4.59 | 11.32% |
| SAP SE | 53.49 | 4.46 | 6.23 | 3.05% | $2.32 | $6.2 | 5.02% |
| Intuit Inc | 61.84 | 10.02 | 11.37 | 2.08% | $0.6 | $2.53 | 11.34% |
| Synopsys Inc | 56.37 | 11.68 | 12.93 | 7.01% | $0.53 | $1.32 | 21.15% |
| Cadence Design Systems Inc | 73.34 | 22.43 | 18.68 | 9.94% | $0.41 | $0.96 | 18.75% |
| Workday Inc | 48.39 | 8.24 | 9.21 | 16.16% | $0.24 | $1.46 | 16.75% |
| Roper Technologies Inc | 41.95 | 3.28 | 9.29 | 2.26% | $0.72 | $1.13 | 12.76% |
| Autodesk Inc | 51.67 | 24.97 | 8.51 | 16.9% | $0.35 | $1.34 | 3.89% |
| Palantir Technologies Inc | 227.44 | 13.03 | 21.14 | 2.8% | $0.11 | $0.5 | 19.61% |
| Datadog Inc | 857.79 | 19.68 | 19.76 | 2.82% | $0.07 | $0.48 | 25.62% |
| Ansys Inc | 56.21 | 5.22 | 12.40 | 5.29% | $0.37 | $0.74 | 15.99% |
| AppLovin Corp | 68.16 | 17.63 | 7.38 | 14.58% | $0.37 | $0.68 | 35.73% |
| PTC Inc | 89.10 | 7.51 | 9.68 | 2.42% | $0.16 | $0.44 | 18.09% |
| Zoom Video Communications Inc | 28.72 | 2.28 | 4.05 | 3.87% | $0.2 | $0.87 | 2.56% |
| Tyler Technologies Inc | 103.96 | 5.83 | 8.84 | 1.34% | $0.09 | $0.21 | 6.35% |
| Bentley Systems Inc | 52.46 | 17.81 | 14.20 | 22.81% | $0.05 | $0.24 | 8.26% |
| NICE Ltd | 43.87 | 4.23 | 6.25 | 2.49% | $0.19 | $0.42 | 9.61% |
| Manhattan Associates Inc | 80.25 | 50.07 | 15.26 | 19.96% | $0.06 | $0.13 | 20.27% |
| Dynatrace Inc | 68.79 | 7.02 | 9.89 | 2.3% | $0.05 | $0.3 | 22.74% |
| Average | 108.63 | 12.66 | 11.17 | 7.22% | $0.54 | $1.58 | 14.83% |
After examining MicroStrategy, the following trends can be inferred:
At 44.49, the stock's Price to Earnings ratio is 0.41x less than the industry average, suggesting favorable growth potential.
Considering a Price to Book ratio of 9.58, which is well below the industry average by 0.76x, the stock may be undervalued based on its book value compared to its peers.
The Price to Sales ratio of 39.24, which is 3.51x the industry average, suggests the stock could potentially be overvalued in relation to its sales performance compared to its peers.
With a Return on Equity (ROE) of 5.93% that is 1.29% below the industry average, it appears that the company exhibits potential inefficiency in utilizing equity to generate profits.
With lower Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $-40 Million, which is -0.07x below the industry average, the company may face lower profitability or financial challenges.
The company has lower gross profit of $100 Million, which indicates 0.06x below the industry average. This potentially indicates lower revenue after accounting for production costs.
The company's revenue growth of -6.09% is significantly lower compared to the industry average of 14.83%. This indicates a potential fall in the company's sales performance.
Debt To Equity Ratio
The debt-to-equity (D/E) ratio indicates the proportion of debt and equity used by a company to finance its assets and operations.
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.
When examining MicroStrategy in comparison to its top 4 peers with respect to the Debt-to-Equity ratio, the following information becomes apparent:
In the context of the debt-to-equity ratio, MicroStrategy holds a middle position among its top 4 peers.
This indicates a moderate level of debt relative to its equity with a debt-to-equity ratio of 1.04, which implies a relatively balanced financial structure with a reasonable debt-equity mix.
Key Takeaways
For MicroStrategy in the Software industry, the PE and PB ratios suggest the company is undervalued compared to its peers. However, the high PS ratio indicates a premium valuation based on revenue. In terms of ROE, EBITDA, gross profit, and revenue growth, MicroStrategy lags behind its industry peers, indicating lower profitability and growth potential.
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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