What are the key factors for S&P 500 inclusion?
Key factors include positive trailing twelve-month EPS, a positive latest quarter, more than 50% public float, and average daily trading volume above 250,000 shares.
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Markets / Finance
MicroStrategy’s Q3 Earnings Projections and S&P 500 Watch
MicroStrategy (MSTR) is nearing potential inclusion in the S&P 500 index thanks to projected Q3 earnings fueled by its Bitcoin (BTC) holdings. Analysts estimate a profitable quarter, meeting a key requirement for index consideration.
Key Insights
- MicroStrategy is projected to post a significant Q3 profit, driven by Bitcoin holdings.
- Estimates suggest earnings per share (EPS) of around $10, bringing the trailing 12-month total to $22.80.
- This would mark the company’s second consecutive profitable quarter, a key criterion for S&P 500 inclusion.
- MicroStrategy has added 42,906 BTC during the quarter at an average cost of $112,100.
- The S&P 500 committee will review index changes in December.
In-Depth Analysis
MicroStrategy’s potential inclusion in the S&P 500 hinges on its Q3 earnings, heavily influenced by Bitcoin’s performance. The company has met several requirements, including being U.S.-listed, having a substantial market cap, sufficient public float, and consecutive profitable earnings reports.
However, the S&P 500 committee previously passed over MicroStrategy, possibly due to concerns about the volatility associated with its Bitcoin treasury. Despite this, the index has shown increasing acceptance of crypto-related companies like Coinbase (COIN) and Block Inc. (SQ).
Analysts project MicroStrategy to report approximately $2.9 billion in net income for Q3, with Bitcoin closing the quarter at $114,390, up from $107,778 at the end of Q2. The official earnings report is scheduled for November 4, setting the stage for potential inclusion in December.
FAQ
When will the S&P 500 committee make its decision?
The next update is expected on the second Friday of December.
Takeaways
- MicroStrategy’s Q3 earnings, driven by Bitcoin, could pave the way for S&P 500 inclusion.
- The company has met several technical requirements, but the committee’s decision remains uncertain.
- Keep an eye on the official earnings report on November 4 for further insights.
Discussion
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Disclaimer
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