Contrasting MicroStrategy (MSTR) & Instructure (INST)

MicroStrategy (NASDAQ: MSTR) and Instructure (NYSE:INST) are both small-cap computer and technology companies, but which is the better business? We will contrast the two businesses based on the strength of their valuation, earnings, profitability, dividends, analyst recommendations, risk and institutional ownership.

Institutional and Insider Ownership

76.3% of MicroStrategy shares are owned by institutional investors. Comparatively, 78.3% of Instructure shares are owned by institutional investors. 21.8% of MicroStrategy shares are owned by company insiders. Comparatively, 62.5% of Instructure shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Analyst Ratings

This is a summary of recent ratings and recommmendations for MicroStrategy and Instructure, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
MicroStrategy 0 4 1 0 2.20
Instructure 0 0 5 1 3.17

MicroStrategy presently has a consensus price target of $170.00, indicating a potential upside of 34.06%. Instructure has a consensus price target of $35.67, indicating a potential upside of 12.34%. Given MicroStrategy’s higher probable upside, analysts plainly believe MicroStrategy is more favorable than Instructure.

Profitability

This table compares MicroStrategy and Instructure’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
MicroStrategy 16.37% 14.99% 10.84%
Instructure -38.12% -827.22% -45.34%

Earnings & Valuation

This table compares MicroStrategy and Instructure’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
MicroStrategy $511.19 million 2.33 $109.23 million $7.24 17.52
Instructure $133.71 million 6.98 -$47.35 million ($1.79) -17.74

MicroStrategy has higher revenue and earnings than Instructure. Instructure is trading at a lower price-to-earnings ratio than MicroStrategy, indicating that it is currently the more affordable of the two stocks.

Volatility & Risk

MicroStrategy has a beta of 0.86, suggesting that its share price is 14% less volatile than the S&P 500. Comparatively, Instructure has a beta of 1.83, suggesting that its share price is 83% more volatile than the S&P 500.

About MicroStrategy

MicroStrategy Incorporated is a provider of enterprise software platforms around the world. The Company is engaged in the design, development, marketing and sales of its software platform through licensing arrangements, and cloud-based subscriptions and related services. It focuses on providing enterprise customers with software platform and services for deploying intelligence applications. Its platform, MicroStrategy 10, consolidates analytics and mobility in a single platform, available both as on-premise software and as a hosted service offering in MicroStrategy Cloud. Its enterprise platform combines business intelligence functionality with data discovery, mobile analytics and identity intelligence generated by digital credentials. MicroStrategy 10 consists of MicroStrategy Analytics, MicroStrategy Mobile and Usher. MicroStrategy Analytics offers solutions to organizations to analyze a range of data and distribute actionable business insight throughout an enterprise.

About Instructure

Instructure, Inc. provides cloud-based learning management platform for academic institutions and companies across the world. The Company operates in the cloud-based learning management systems segment. The Company builds its learning management applications, Canvas for the education market and Bridge for the corporate market, to enable its customers to develop, deliver and manage face-to-face and online learning experiences. The Company develops software that students, teachers and employees use to help achieve their education and learning goals. Its applications develop academic and corporate learning by providing a platform for instructors and learners, enabling frequent and open interactions, streamlining workflow, and allowing the creation and sharing of content. The Company’s platform runs on a cloud-based architecture that enables users to teach, learn and engage across a range of application environments, operating systems, devices and locations.

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