Don't Buy MicroStrategy (MSTR) Before Checking its Profitability!

MicroStrategy dropped -3.2% during today's morning session, underperforming the S&P 500 by -2.6%. The lackluster performance from the mid-cap Software—Application company may seem like an opportunity to buy shares at a discount, but it's a good idea to take a closer look at the company's financials first.

MicroStrategy's Operating Margins

Date Reported Total Revenue ($ MM) Operating Expenses ($ MM) Operating Margins (%) YoY Growth (%)
2021-12-31 511 373 9.02 -24.01
2020-12-31 481 333 11.87 5752.38
2019-12-31 486 387 -0.21 -126.25
2018-12-31 498 394 0.8 n/a

MicroStrategy's Cash Flows

Date Reported Cash Flow from Operations ($ MM) Capital expenditures ($ MM) Free Cash Flow ($ MM) YoY Growth (%)
2021-12-31 94 -2,629 -2,535 -135.84
2020-12-31 54 -1,129 -1,075 -2221.01
2019-12-31 61 -10 51 1240.52
2018-12-31 11 -7 4 n/a

MicroStrategy could be more effective in converting profits into cash, since its cash flows are averaging $-888,992,000.00, with a rate of change of -372.1% and a variability of 136.6%. For this reason, investors with a long term horizon will may want to look elsewhere if stability is an important factor of their stock screening.

The above analysis is intended for educational purposes only and was performed on the basis of publicly available data. It is not to be construed as a recommendation to buy or sell any security. Any buy, sell, or other recommendations mentioned in the article are direct quotations of consensus recommendations from the analysts covering the stock, and do not represent the opinions of Market Inference or its writers. Past performance, accounting data, and inferences about market position and corporate valuation are not reliable indicators of future price movements. Market Inference does not provide financial advice. Investors should conduct their own review and analysis of any company of interest before making an investment decision.