MicroStrategy (MSTR) Is Struggling. Consider These 3 Stocks Instead.

MicroStrategy Incorporated (NASDAQ: MSTR) has recently been downgraded by our Zen Ratings system to have a Zen Rating of D. (It was an F the other day; despite rising slightly in the ranks, we still call it a Sell.)

This is not a good sign for the business intelligence software company, considering that stocks with that rating on average had a loss of -8.02% per year. To break it down further by Component Grades (grades revolving around different factors, such as investor sentiment or whether the stock has solid financials), see the following:

As you can see, our system has determined that it is not a strong value proposition, investor sentiment is looking poor, and its financial foundations are not up to par with other companies we cover.

For a stock to receive an F Zen Rating, it must be in the lowest 5% of stocks we cover. And while nothing is certain when it comes to investing, there are likely better options for you to consider in the app space right now.

What are those stocks? Here are three strong options:

1. Zoom Communications (NASDAQ: ZM)

We’ve talked about Zoom a few times before, but the video call and communications app company has found itself on better footing after readjusting to the new normal post-pandemic, and it has had an overall excellent year (share price over the last 12 months has increased by +34.88%). 

Zoom is also at an advantage in uncertain and volatile times, given that it has a large cash pool and recurring subscription revenue to rely upon should the road get bumpy. Additionally, it is working on its AI-related offerings, either hoping to expand utility for users or reduce expenses for itself. 

2. PagerDuty (NYSE: PD) 

This is a provider of key incident communications management software that helps organizations worldwide obtain intelligence, faster management, and analytics. Working with industries in multiple sectors, demand for its services will remain, and the company is unlikely to be affected heavily by tariffs (a strength of the apps sector).

Going heavily into marketing itself as a major user of AI in recent times, PagerDuty is also showing strong signs of growth and increased demand (with investors agreeing). While not strictly an essential service itself, PD’s clients often are essential services.

3. Mitek Systems (NASDAQ: MITK)

MITK specializes in mobile image capture and identity verification systems (everything from check fraud detection to easier login options in apps), both of which are growing ever more important in a world where hackers get more savvy and have more tools than ever before. You might be personally familiar with some of its software being used in banking applications.

In relation to this, MITK has strong demand working for it, given its field and the current times, and it receives a Component Grade of A for Growth (learn more here). This is related to concerns about AI-related fraud and a rise in cybercrime in general. 

There are plenty of good options to review. However, note that the above are only 3 of 16 app industry stocks that received a Zen Rating of A. And if you want to know more and have access to all the information you need, then WallStreetZen Premium is what you want. You’ll gain access to fundamental information, an unlimited watchlist, and more.

Additionally, if you’re looking for a more guided approach to selecting stocks for your portfolio and want to understand more about how the market responds to global events, then Zen Investor is the solution you need. With it, you’ll receive regular updates from our own Steve Reitmeister, an expert investor with more than 40 years of experience. With his guidance, you’ll be more informed than ever.

What to Do Next?

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