MicroStrategy (NASDAQ:MSTR) vs. Magic Software Enterprises (NASDAQ:MGIC) Head to Head Contrast


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Magic Software Enterprises (NASDAQ:MGIC) and MicroStrategy (NASDAQ:MSTR) are both computer and technology companies, but which is the better business? We will contrast the two companies based on the strength of their institutional ownership, analyst recommendations, risk, profitability, dividends, valuation and earnings.

Analyst Recommendations

This is a summary of recent ratings for Magic Software Enterprises and MicroStrategy, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Magic Software Enterprises 0 0 2 0 3.00
MicroStrategy 4 1 3 0 1.88

Magic Software Enterprises presently has a consensus target price of $20.00, suggesting a potential upside of 22.40%. MicroStrategy has a consensus target price of $404.17, suggesting a potential downside of 34.48%. Given Magic Software Enterprises’ stronger consensus rating and higher possible upside, analysts plainly believe Magic Software Enterprises is more favorable than MicroStrategy.

Profitability

This table compares Magic Software Enterprises and MicroStrategy’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Magic Software Enterprises 4.85% 12.69% 8.22%
MicroStrategy 0.41% 7.36% 3.97%

Earnings and Valuation

This table compares Magic Software Enterprises and MicroStrategy’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Magic Software Enterprises $325.63 million 2.46 $20.27 million $0.58 28.17
MicroStrategy $486.33 million 12.16 $34.35 million $1.22 505.64

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

Volatility and Risk

Magic Software Enterprises has a beta of 1.29, meaning that its share price is 29% more volatile than the S&P 500. Comparatively, MicroStrategy has a beta of 1.59, meaning that its share price is 59% more volatile than the S&P 500.

Insider & Institutional Ownership

17.8% of Magic Software Enterprises shares are held by institutional investors. Comparatively, 69.8% of MicroStrategy shares are held by institutional investors. 4.5% of Magic Software Enterprises shares are held by company insiders. Comparatively, 26.9% of MicroStrategy shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Summary

MicroStrategy beats Magic Software Enterprises on 9 of the 14 factors compared between the two stocks.

About Magic Software Enterprises

Magic Software Enterprises Ltd. provides proprietary application development, business process integration, vertical software solutions, and information technologies (IT) outsourcing software services in Israel and internationally. The company's Software Services segment develops, markets, sells, and supports application platform, software applications, and business and process integration solutions and related services. Its IT Professional Services segment offers IT services in the areas of infrastructure design and delivery, application development, technology planning and implementation services, communications services and solutions, and supplemental outsourcing services. The company offers proprietary application platforms, such as Magic xpa for developing and deploying business applications; AppBuilder for building, deploying, and maintaining high-end and mainframe-grade business applications; Magic xpi for application integration; Magic xpc, a hybrid integration platform as a service; Magic SmartUX, a mobile development application platform; and FactoryEye for virtualization of production data. It also provides vertical software solutions comprising Clicks, a software solution for healthcare providers; Leap, a software solution for business support systems; Hermes Solution, a packaged software solution for managing air cargo ground handling; HR Pulse, a customized single-tenant software as a service tool; and MBS Solution, a proprietary system for managing TV broadcast management. In addition, the company provides software maintenance, support, training, and consulting services. It serves oil and gas, telecommunications, financial, healthcare, and industrial sectors; and public institutions and international agencies. The company was formerly known as Mashov Software Export (1983) Ltd. and changed its name to Magic Software Enterprises Ltd. in 1991. Magic Software Enterprises Ltd. was founded in 1983 and is headquartered in Or Yehuda, Israel.

About MicroStrategy

MicroStrategy Incorporated provides enterprise analytics software and services worldwide. It offers MicroStrategy 2021, an enterprise platform, which provides a modern analytics experience by delivering insights across multiple devices to users via hyperintelligence products, visualization and reporting capabilities, mobility features, and custom applications developed on the platform; analysts and data scientists with seamless access to trusted, governed data directly within their tools; and APIs and gateways, multiple deployment options, enterprise semantic graph, scalability, and security. The company also provides MicroStrategy Support that helps customers to achieve their system availability and uptime goals, and to improve the overall experience through highly responsive troubleshooting and proactive technical product support. In addition, it offers MicroStrategy Consulting that provides customers with architecture and implementation services to help them quickly realize results, and helps to achieve returns on investment derived from understanding of data; and MicroStrategy Education that offers free and paid learning options. The company provides its services through enterprise sales force and channel partners. It serves companies from a range of industries, including retail, consulting, technology, manufacturing, finance, banking, insurance, healthcare, education, and telecommunications, as well as the public sector. The company was founded in 1989 and is headquartered in Tysons Corner, Virginia.

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