Is MicroStrategy, Inc. overvalued or undervalued?

As of 17 October 2025, the valuation grade for MicroStrategy, Inc. moved from fair to attractive, indicating a shift towards a more favorable assessment. The company appears to be undervalued, particularly when considering its P/E ratio of 47, which is lower than its peer Spotify Technology SA at 92.22, and its EV to Sales ratio of 240.51, which also highlights a significant gap compared to industry standards. Additionally, the EV to Capital Employed ratio stands at 2.65, suggesting that the company's capital is being utilized effectively despite its negative EV to EBIT and EV to EBITDA ratios.
In terms of performance, MicroStrategy has outperformed the S&P 500 over the long term, with a remarkable 3-year return of 1210.86% compared to the S&P 500's 81.19%. However, recent short-term returns have been negative, with a 1-month decline of 12.08%, contrasting sharply with the S&P 500's 0.96% gain. Overall, the combination of attractive valuation ratios and strong long-term performance suggests that MicroStrategy is currently undervalued in the market.