Strategy Inc (NASDAQ: MSTR)

Sector: Technology Industry: Software - Application CIK: 0001050446
Market Cap 47.27 Bn
P/B 0.90
P/E 6.12
P/S 99.52
ROIC (Qtr) 13.60
Div Yield % 0.00
Rev 1y % (Qtr) 10.87
Total Debt (Qtr) 8.22 Bn
Debt/Equity (Qtr) 0.16

About

MicroStrategy Inc. (MSTR) operates in the digital assets industry, with a primary focus on developing and providing AI-powered enterprise analytics software and accumulating and holding bitcoin as its primary treasury reserve asset. The company's software business has been operating for over 30 years and generates cash flows that enable it to pursue its bitcoin strategy. MicroStrategy's software business serves a wide range of customers across various industries, including finance, healthcare, and technology. The company's software products include...

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Price action

Investment thesis

Bull case

  • Healthy cash reserves of 56.20M provide 177.85x coverage of short-term debt 316000, demonstrating strong liquidity position and minimal refinancing risk.
  • Strong tangible asset base of 73.62B provides 8.95x coverage of total debt 8.22B, indicating robust asset backing and low credit risk.
  • Tangible assets of 73.62B provide exceptional 360.72x coverage of deferred revenue 204.09M, showing strong service capability backing.
  • Tangible assets of 73.62B provide robust 267.66x coverage of other current liabilities 275.05M, indicating strong asset backing.
  • Long-term investments of 73.21B provide solid 8.90x coverage of long-term debt 8.22B, indicating strategic financial planning.

Bear case

  • Operating cash flow of (62.94M) barely covers its investment activities of (37.49B), with a coverage ratio of 0, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Investment activities of (37.49B) provide weak support for R&D spending of 96.79M, which is -387.38x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
  • Operating cash flow of (62.94M) provides insufficient coverage of deferred revenue obligations of 204.09M, which is -0.31x, raising concerns about future service delivery capabilities.
  • The company's operating cash flow of (62.94M) shows concerning coverage of stock compensation expenses of 62.38M, with a -1.01 ratio indicating potential earnings quality issues.
  • Free cash flow of (108.35M) provides weak coverage of capital expenditures of 45.41M, with a -2.39 ratio suggesting additional external financing needs for growth initiatives.

Geographical Breakdown of Revenue (2024)

Product and Service Breakdown of Revenue (2024)

Peer comparison

Companies in the Software - Application
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 SAP Sap Se 288.31 Bn 34.60 6.72 10.73 Bn
2 CRM Salesforce, Inc. 248.32 Bn 34.38 6.16 11.14 Bn
3 SHOP Shopify Inc. 212.27 Bn 119.19 19.85 1.12 Bn
4 INTU Intuit Inc. 180.73 Bn 43.89 9.30 6.78 Bn
5 UBER Uber Technologies, Inc 178.38 Bn 10.72 3.60 12.19 Bn
6 NOW ServiceNow, Inc. 146.98 Bn 84.91 11.60 2.40 Bn
7 ADBE Adobe Inc. 144.48 Bn 20.77 6.23 6.64 Bn
8 ADP Automatic Data Processing Inc 108.20 Bn 26.16 5.18 9.77 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 0.75 2.65
EV to Cash from Ops. EV/CFO -880.71 13.37
EV to Debt EV to Debt 6.74 57.69
EV to EBIT EV/EBIT 5.05 19.12
EV to EBITDA EV/EBITDA 5.03 15.00
EV to Free Cash Flow [EV/FCF] EV/FCF -511.58 14.69
EV to Market Cap EV to Market Cap 1.17 -92.28
EV to Revenue EV/Rev 116.71 4.60
Price to Book Value [P/B] P/B 0.90 4.26
Price to Earnings [P/E] P/E 6.12 -136.90
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 38.66 -3.95
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 4.25
Dividend per Basic Share Div per Share (Qtr) 0.00 0.15
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 2.52
Interest Coverage Int. cover (Qtr) 156.03 -52.32
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -1,393.32 -259.78
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 16.59 9,763.58
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 1.61
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 2,182.73 -263.15
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 1,391.64 56.46
EBIT Growth (1y) % EBIT 1y % (Qtr) 1,305.27 -225.15
EBT Growth (1y) % EBT 1y % (Qtr) 1,226.55 -86.10
EPS Growth (1y) % EPS 1y % (Qtr) 1,183.97 123.84
FCF Growth (1y) % FCF 1y % (Qtr) -188.43 -36.82
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) -3.11 95.08
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.01 0.58
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.02
Cash Ratio Cash Ratio (Qtr) 0.17 3.75
Current Ratio Curr Ratio (Qtr) 0.66 8.16
Debt to Equity Ratio Debt/Equity (Qtr) 0.16 0.17
Interest Cover Ratio Int Coverage (Qtr) 156.03 -52.32
Times Interest Earned Times Interest Earned (Qtr) 156.03 -52.32
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 2,318.70 -100.06
EBIT Margin % EBIT Margin % (Qtr) 2,311.49 -164.24
EBT Margin % EBT Margin % (Qtr) 2,296.67 -116.94
Gross Margin % Gross Margin % (Qtr) 70.10 58.20
Net Profit Margin % Net Margin % (Qtr) 1,625.00 -121.65