MicroStrategy Worth $230, JMP Analyst Says

In a report published Tuesday, JMP Securities analyst Greg McDowell maintained a Market Outperform rating on

, while raising the price target from $210 to $230. MicroStrategy reported its 2Q15 non-GAAP EPS at $2.22 and revenue at $133 million, ahead of expectations. The company's robust revenues were driven by better-than-expected product revenues which grew for the first time in three quarters. The company's product license and subscription revenue in North America rose 21 percent y/y, while international product revenue was down 25 percent due to forex headwinds and weak international markets. "Large deal activity was impressive, with five deals over one million versus only two in the year-ago quarter. Non-GAAP operating margins increased a strong 3,600 bps yoy to 29%, and while the company indicated that the rate of operating margin expansion will moderate, we continue to believe MicroStrategy can run the business moving forward in the 25-30% range," analyst Greg McDowell wrote. MicroStrategy's security platform, Usher, is expected to open up a "whole new set of opportunities" including partner relationships. The product had seen "significant interest" from customers including "major financial services, RFPs, and government opportunities," the JMP Securities report stated. The non-GAAP EPS estimates for 2015 and 2016 were raised from $8.18 to $8.38 and from $9.22 to $9.94, respectively.