Michael Saylor’s MicroStrategy Inc. (NASDAQ:MSTR) reported third-quarter Fiscal 2022 results registering solid year-over-year growth in subscription revenue.
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Also, thanks to the stable Bitcoin (BTC-USD) prices in the quarter, MSTR recorded a minor $0.7 million bitcoin impairment charge in Q3 vis-à-vis a $917.8 million impairment charge in the prior quarter.
MicroStrategy provides business intelligence, mobile software, and cloud-based services. Additionally, investing in bitcoin and holding it for a long time is one of its primary corporate strategies.
Notably, in Q3, MicroStrategy added 301 additional bitcoins and ended the quarter with 130,000 bitcoins, valued at $1.993 billion. MSTR stock has lost 53.9% year to date, in tandem with the highly volatile bitcoin prices this year.
MicroStrategy’s Q3 Results in a Nutshell
In Q3, MSTR posted an adjusted loss of $0.96 per share, significantly lower than the prior-year quarter’s figure of $2.84 per share.
However, MicroStrategy’s total revenue fell 2.1% year-over-year to $125.36 million. Meanwhile, a 51.2% leap in Subscription services revenue to $16.41 million was offset by a 13.7% decline in Product licenses revenue to $22.29 million. Moreover, Product support revenue fell 6.2% to $66.01 million, and Total other services revenue remained relatively flat at $20.65 million.
Current subscription billings also jumped 79% year-over-year to $14.4 million in the quarter, though they fell sequentially from $20.1 million.
Phong Le, who was promoted to be the CEO of MSTR in the Q2 after Saylor stepped down, commented, “We are continuing to see the global adoption of our cloud platform by both domestic and international customers, and to benefit from the longstanding durability of our enterprise analytics business, with a third-quarter renewal rate of 95%, despite the ongoing macroeconomic headwinds.”
Is MSTR Stock a Good Buy?
On TipRanks, MicroStrategy stock has a Moderate Buy consensus rating. This is based on two Buys versus one Sell rating. The average MicroStrategy price forecast of $562.50 implies a massive 118.7% upside potential to current levels.
Ending Thoughts
MicroStrategy may not be sailing with the right momentum currently. Having said that, it boasts of being the world’s largest publicly traded corporate owner of bitcoin. Further, Saylor has conviction in the long-term prospects of bitcoin. Once appropriate regulations are in place and the market becomes more stable, investing in bitcoins might prove hugely beneficial for the company. Moreover, Wall Street has a humongous twelve-month upside implied in the target price for the stock, adding even more appeal to the long-term stock trajectory.
