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MicroStrategy (MSTR) Dips More Than Broader Markets: What You Should Know

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In the latest trading session, MicroStrategy (MSTR - Free Report) closed at $339.26, marking a -0.4% move from the previous day. This change lagged the S&P 500's daily loss of 0.22%. Elsewhere, the Dow lost 0.31%, while the tech-heavy Nasdaq lost 0.23%.

Coming into today, shares of the business software company had gained 1.6% in the past month. In that same time, the Computer and Technology sector gained 3.73%, while the S&P 500 gained 2.08%.

Investors will be hoping for strength from MicroStrategy as it approaches its next earnings release. On that day, MicroStrategy is projected to report earnings of $0.74 per share, which would represent year-over-year growth of 177.08%. Meanwhile, our latest consensus estimate is calling for revenue of $126.2 million, up 0.67% from the prior-year quarter.

MSTR's full-year Zacks Consensus Estimates are calling for earnings of $31.05 per share and revenue of $502.4 million. These results would represent year-over-year changes of +124.92% and +0.63%, respectively.

It is also important to note the recent changes to analyst estimates for MicroStrategy. These revisions help to show the ever-changing nature of near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate remained stagnant. MicroStrategy is holding a Zacks Rank of #5 (Strong Sell) right now.

Digging into valuation, MicroStrategy currently has a Forward P/E ratio of 10.97. For comparison, its industry has an average Forward P/E of 27.67, which means MicroStrategy is trading at a discount to the group.

The Computer - Software industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 161, putting it in the bottom 37% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

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