From Nasdaq

May 30, 2025 9:30:00 AM:

Brokerage recommendations can influence stock prices, but are they reliable? MicroStrategy has an average brokerage recommendation of 1.38, leaning towards Buy. However, studies show brokerage recommendations may not accurately predict stock price movements due to analysts’ positive bias. The Zacks Rank, based on earnings estimate revisions, is a more reliable indicator.

Earnings estimate revisions are key to the Zacks Rank, which classifies stocks on a scale from Strong Buy to Strong Sell. Analysts’ optimistic bias in brokerage recommendations misleads investors, while the Zacks Rank’s correlation with stock price movements is well-documented. The Zacks Rank is quantitative, based on earnings estimate revisions, offering a more accurate assessment of a stock’s potential.

MicroStrategy currently holds a Zacks Rank #3 (Hold) due to steady earnings prospects. With a consensus estimate of -$0.41 for the current year, caution is advised despite the Buy-equivalent ABR. The Zacks Rank is more timely and reliable in predicting stock price movements compared to brokerage recommendations. It may be wise to validate the ABR with the Zacks Rank before making investment decisions.

Read more at Nasdaq: Brokers Suggest Investing in MicroStrategy (MSTR): Read This Before Placing a Bet