Brokers Suggest Investing in Strategy (MSTR): Read This Before Placing a Bet

Core Viewpoint - The average brokerage recommendation (ABR) for Strategy (MSTR) is 1.47, indicating a consensus leaning towards a "Strong Buy" [2]. Brokerage Recommendations - The ABR is based on recommendations from 15 brokerage firms, with 12 ratings as "Strong Buy" and 1 as "Buy," representing 80% and 6.7% of total recommendations respectively [2]. - Despite the positive ABR, relying solely on brokerage recommendations may not be advisable, as studies show they often fail to guide investors effectively towards stocks with high price appreciation potential [5][10]. Analyst Bias - Analysts from brokerage firms tend to exhibit a strong positive bias in their ratings due to vested interests, issuing five "Strong Buy" recommendations for every "Strong Sell" [6][10]. - This misalignment of interests can lead to misleading guidance for retail investors regarding stock price movements [7][10]. Zacks Rank Comparison - Zacks Rank, a proprietary stock rating tool, categorizes stocks from 1 (Strong Buy) to 5 (Strong Sell) and is based on earnings estimate revisions, which correlate strongly with near-term stock price movements [8][11]. - The Zacks Rank is distinct from ABR; while ABR is based on brokerage recommendations and can be outdated, Zacks Rank reflects timely earnings estimates [9][13]. Current Earnings Estimates - The Zacks Consensus Estimate for Strategy remains unchanged at -$15.73 over the past month, suggesting stable analyst views on the company's earnings prospects [14]. - The unchanged consensus estimate has resulted in a Zacks Rank of 3 (Hold) for Strategy, indicating a cautious approach despite the positive ABR [15].