MicroStrategy (NASDAQ:MSTR) Stock Declines 6.4% – Is It Time to Sell?

On January 1st, 2025, MicroStrategy Incorporated (NASDAQ:MSTR) saw its stock drop by 6.4%. The shares fell to a low of $301.75, with the last recorded price at $308.82. During mid-day trading, around 7,260,691 shares changed hands, marking a 62% decline compared to the average daily volume of 18,921,078 shares. The previous closing price was $330.00.

Analysts Update Price Targets

Recent evaluations from analysts have provided mixed perspectives on MicroStrategy's stock. Maxim Group raised their price target from $193.00 to $270.00 and assigned a "buy" rating in a report dated October 31st. Meanwhile, BTIG Research increased their target from $290.00 to $570.00, also giving it a "buy" rating on November 21st. Barclays uplifted their price target from $275.00 to $515.00 and assigned an "overweight" rating, while TD Cowen also boosted their estimate from $392.00 to $525.00. Additionally, Sanford C. Bernstein issued an "outperform" rating with a price target of $600.00 on December 12th. While one analyst has given a sell rating, eight have endorsed a buy rating. According to MarketBeat.com, the consensus rating is a "Moderate Buy" with a price target of $479.25.

Latest Stock Report on MSTR

MicroStrategy's Recent Performance Metrics

MicroStrategy exhibits a debt-to-equity ratio of 1.12, a quick ratio of 0.65, and a current ratio of 0.65. The company's market capitalization stands at $69.41 billion, with a price-to-earnings ratio of -137.46 and a beta of 3.17. The fifty-day moving average price for the stock is $338.53, while the 200-day moving average is $217.39.

MicroStrategy last announced its earnings on October 30th, revealing an earnings per share (EPS) of ($1.56) for the quarter, which fell short of analysts' expectations of ($0.12) by a significant margin of $1.44. The company recorded a negative return on equity of 17.31% and a concerning net margin of 87.05%. The reported revenue for the quarter was $116.07 million, whereas analysts had projected $121.45 million. This represents a 10.3% decrease in revenue compared to the same quarter last year.

Insider Trading Activity

In additional news, Director Stephen X. Graham sold 20,000 shares of MicroStrategy on November 21st for an average price of $451.36, totaling $9,027,200. After the sale, he retained 6,970 shares valued at approximately $3,145,979.20, marking a 74.16% reduction in his holdings. Another insider, Chief Accounting Officer Jeanine Montgomery, sold 752 shares on November 14th at an average price of $322.45, worth $242,482.40. Following this transaction, she now holds 6,418 shares valued at $2,069,484.10, a 10.49% decrease in her stake. In the past three months, insiders sold a total of 102,000 shares, amounting to $32,259,177, with 13.18% of the stock being owned by insiders.

Institutional Ownership Trends

Various hedge funds have recently modified their stakes in MicroStrategy. Signaturefd LLC increased its holdings by 13.6% in the second quarter, owning 50 shares valued at $69,000 after adding 6 shares. Concurrent Investment Advisors LLC acquired a new position worth $308,000 during the same quarter. Additionally, Banque Cantonale Vaudoise raised its stake by 198.6% to now own 215 shares valued at $296,000. CIBC Asset Management Inc. grew its ownership by 59.3%, now possessing 419 shares valued at $577,000. Furthermore, Acorn Financial Advisory Services Inc. ADV increased its holdings by 40.6%, owning 5,614 shares valued at $7,733,000. Overall, institutional and hedge funds own approximately 59.84% of MicroStrategy stock.

About MicroStrategy

MicroStrategy Incorporated specializes in providing enterprise analytics software and services that leverage artificial intelligence. They operate across various regions, including the United States, Europe, the Middle East, Africa, and more. Among their offerings, MicroStrategy ONE provides accessible insights for decision-making, while the MicroStrategy Cloud for Government ensures around-the-clock threat monitoring tailored to governmental and financial institutions' needs.

Conclusion

The recent decline in MicroStrategy's stock price raises the question of whether it is time to sell. As investors assess the implications of earnings results, insider activity, and analyst ratings, a careful consideration of potential risks and opportunities will be crucial in making informed decisions.

MicroStrategy, Stocks, Analysts