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MicroStrategy Misses on Both Revenue and Earnings

By Seth Jayson – Updated Apr 7, 2017 at 12:02PM

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Just the facts, Fool.

MicroStrategy (Nasdaq: MSTR) reported earnings on Oct. 29. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Sep. 30 (Q3), MicroStrategy missed estimates on revenues and missed estimates on earnings per share.

Compared to the prior-year quarter, revenue expanded slightly and GAAP earnings per share dropped.

Gross margins dropped, operating margins grew, net margins shrank.

Revenue details
MicroStrategy tallied revenue of $143.2 million. The nine analysts polled by S&P Capital IQ hoped for revenue of $149.5 million on the same basis. GAAP reported sales were 1.1% higher than the prior-year quarter's $141.7 million.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
EPS came in at $0.43. The eight earnings estimates compiled by S&P Capital IQ predicted $0.84 per share. GAAP EPS of $0.43 for Q3 were 2.3% lower than the prior-year quarter's $0.44 per share.

Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 73.8%, 30 basis points worse than the prior-year quarter. Operating margin was 4.7%, 360 basis points better than the prior-year quarter. Net margin was 3.3%, 20 basis points worse than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $170.9 million. On the bottom line, the average EPS estimate is $1.55.

Next year's average estimate for revenue is $607.3 million. The average EPS estimate is $3.07.

Investor sentiment
The stock has a two-star rating (out of five) at Motley Fool CAPS, with 187 members out of 219 rating the stock outperform, and 32 members rating it underperform. Among 68 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 55 give MicroStrategy a green thumbs-up, and 13 give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on MicroStrategy is hold, with an average price target of $130.00.

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Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. The Motley Fool has no positions in the stocks mentioned above. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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