Recommendation: Buy
| Entry Date | Symbol | Recommendation | Entry Price (USD) | Target 1 (USD) | Target 2 (USD) | Holding Duration | Potential Upside |
|---|---|---|---|---|---|---|---|
| 29 Nov, 24 | MSTR | Buy | USD 388.84 | USD 432.0 | USD 458.0 | 6 days | 17.8% |
Data Powered by EOD Historical Data (“EODHD”).
MicroStrategy Incorporated provides artificial intelligence-powered enterprise analytics software and services in the United States, Europe, the Middle East, Africa, and internationally. It offers MicroStrategy ONE, which provides non-technical users with the ability to directly access novel and actionable insights for decision-making; and MicroStrategy Cloud for Government service, which offers always-on threat monitoring that meets the rigorous technical and regulatory needs of governments and financial institutions. The company also provides MicroStrategy Support that helps customers achieve their system availability and usage goals through highly responsive troubleshooting and assistance; MicroStrategy Consulting, which provides architecture and implementation services to help customers realize their desired results; and MicroStrategy Education that offers free and paid learning options. In addition, it engages in the development of bitcoin. The company offers its services through direct sales force and channel partners. It serves the U.S. government, state and local governments, and government agencies, as well as a range of industries, including retail, banking, technology, manufacturing, insurance, consulting, healthcare, telecommunications, and the public sector. The company was incorporated in 1989 and is headquartered in Tysons Corner, Virginia.
Effective Working Capital: Cash Cycle of 87.5 Days in Q3 FY24 vs 88.8 Days in Q3 FY23
Decreasing Credit Risk Exposure: Debt-Equity of 1.12x in Q3 FY24 vs 2.59x in Q3 FY23
Lower Profitability: Gross Margin of 70.4% in Q3 FY24 vs Industry Median of 77.8%
Lower Liquidity: Current Ratio of 0.65x in Q3 FY24 vs Industry Median of 1.74x
MicroStrategy's risk profile is heavily influenced by its large Bitcoin investment, struggles in growing its core business intelligence software, and Michael Saylor's leadership. While it has innovation in the BI market, its reliance on Bitcoin adds significant volatility and exposure to crypto-market risks. Investors need to weigh Bitcoin’s upside potential against the downside risks to the company’s financial health and strategy.
| Entry Price | Support* | Target 1 | Target 2 |
|---|---|---|---|
| 388.84 | 333.0 | 432.0 | 458.0 |
Data Source: REFINITIV, Analysis: StockNextt
*Support can be considered as an indicative stop-loss, and if prices move below that level on closing basis individuals may evaluate exiting the position depending on their risk appetite, previous holdings, and other factors considered. The support and resistance levels may need to be re-evaluated within 4-6 weeks’ time frame depending on the stock price movements from the date of recommendation on the stock.
Price Action Analysis (on the daily chart)
The share price of MSTR is trading close to important support levels, indicating the possibility of short-term gains. As the stock progresses upward, it is expected to face a significant resistance level at USD 447.10, which could be approached in the near term, likely within the next 2-4 weeks. If the stock successfully breaches this level, it could lead to further buying momentum and potentially extended gains in the stock.
Technical Indicators Analysis (On the daily chart)
On the daily chart, the 14-period Relative Strength Index (RSI) is trending higher, indicating a positive bias. Trading volumes seem to confirm this upward trend. Furthermore, the stock price moving above its 21-day Simple Moving Average (SMA), supporting positive bias.
General Recommendation
As per the above-mentioned price action and technical indicators analysis, MicroStrategy Incorporated (NASDAQ: MSTR) is looking technically well-placed on the chart, and a ‘Buy’ recommendation has been given on the stock. Investment decision should be made depending on an individual’s appetite for upside potential, risks, and any previous holdings. This recommendation is purely based on technical analysis, and fundamental analysis has not been considered in this report. The summary of recommendation is as follows:
Data Powered by EOD Historical Data (“EODHD”).
Sector: Technology Industry: Software - Application
| Company | Change (USD) | Price (USD) | Trailing PE (x) | Forward PE (x) | Price Sales TTM (x) | Price to Book Value (x) | Enterprise Value to Revenue (x) | Enterprise Value to EBITDA (x) |
|---|---|---|---|---|---|---|---|---|
| MSTR MicroStrategy Incorporated |
-16.27 4.65% | 333.37 | - | 1000.00 | 50.59 | 11.60 | 55.02 | -447.3154 |
| CRM Salesforce.com Inc |
1.65 0.49% | 338.88 | 100.89 | 27.47 | 7.42 | 4.34 | 7.44 | 26.81 |
| SAPGF SAP SE |
0.05 0.02% | 245.50 | 76.28 | 22.88 | 5.61 | 3.84 | 5.59 | 26.18 |
| SAP SAP SE ADR |
1.52 0.62% | 245.97 | 75.80 | 22.37 | 5.62 | 3.75 | 5.51 | 25.79 |
| INTU Intuit Inc |
-5.88 0.90% | 643.93 | 55.56 | 32.68 | 11.28 | 10.07 | 11.62 | 40.11 |
Data Powered by EOD Historical Data (“EODHD”).
Related Risks: This report may be looked at from a high-risk perspective and recommendations are provided for a short duration. Recommendations provided in this report are solely based on technical parameters, and the fundamental performance of the stocks has not been considered in the decision-making process. Other factors which could impact the stock prices include market risks, regulatory risks, interest rates risks, currency risks, social and political instability risks etc.
Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.
Target: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Target 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Target 2 may act as the crucial resistance level for the stock.
Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.
Disclaimer :
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