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Strength Seen in MicroStrategy (MSTR): Can Its 6.8% Jump Turn into More Strength?

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MicroStrategy (MSTR - Free Report) shares rallied 6.8% in the last trading session to close at $313.40. This move can be attributable to notable volume with a higher number of shares being traded than in a typical session. This compares to the stock's 0.3% loss over the past four weeks.

The increase in share price can be attributed to strong momentum in Bitcoin. Bitcoin is surging primarily owing to last week’s announcement by BlackRock to float a Bitcoin exchange-traded fund (ETF).

Recent momentum in Bitcoin, despite the Securities and Exchange Commission (SEC) suits against Binance and Coinbase, is a major tailwind as the company continues to purchase bitcoin to strategically manage its balance sheet and repay its bitcoin-backed loan.

This business software company is expected to post quarterly earnings of $0.71 per share in its upcoming report, which represents a year-over-year change of +100.8%. Revenues are expected to be $124.7 million, up 2.2% from the year-ago quarter.

Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements.

For MicroStrategy, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on MSTR going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

MicroStrategy is a member of the Zacks Computer - Software industry. One other stock in the same industry, Progress Software (PRGS - Free Report) , finished the last trading session 0.3% lower at $58.35. PRGS has returned 0.2% over the past month.

For Progress Software, the consensus EPS estimate for the upcoming report has remained unchanged over the past month at $0.90. This represents a change of -13.5% from what the company reported a year ago. Progress Software currently has a Zacks Rank of #3 (Hold).


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