An analyst from H.C. Wainwright, Mike Colonnese, has begun coverage of Strategy (MSTR, Financial) by assigning a Buy rating along with a price target of $480. Colonnese highlights Strategy as an intriguing option for investors seeking significant exposure to bitcoin, which he refers to as the best performing asset class of the last ten years.
The firm anticipates a bitcoin rally in the latter half of 2025, driven by various favorable catalysts. H.C. Wainwright appreciates Strategy's capacity to effectively raise equity and debt capital, leveraging the largest corporate bitcoin reserve globally to acquire more coins swiftly. This strategy, according to the firm, warrants a considerable premium over the net asset value.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 12 analysts, the average target price for Strategy (MSTR, Financial) is $443.34 with a high estimate of $600.00 and a low estimate of $200.00. The average target implies an upside of 20.07% from the current price of $369.25. More detailed estimate data can be found on the Strategy (MSTR) Forecast page.
Based on the consensus recommendation from 12 brokerage firms, Strategy's (MSTR, Financial) average brokerage recommendation is currently 2.0, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Strategy (MSTR, Financial) in one year is $19.55, suggesting a downside of 94.71% from the current price of $369.25. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Strategy (MSTR) Summary page.
MSTR Key Business Developments
Release Date: February 05, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- MicroStrategy Inc (MSTR, Financial) reported a 50% year-over-year increase in subscription billings and a 48% increase in subscription services revenues, indicating strong growth in their cloud platform.
- The company successfully adopted FASB's fair value accounting standard for Bitcoin holdings, leading to a significant increase in retained earnings.
- MicroStrategy Inc (MSTR) was included in the NASDAQ 100 index, enhancing its visibility and institutional adoption of its Bitcoin strategy.
- The company raised $18.8 billion in net proceeds through equity offerings and $6.2 billion through convertible notes, showcasing strong capital market execution.
- MicroStrategy Inc (MSTR) introduced innovative financial instruments like the STRK preferred stock, broadening its investor base and offering lower volatility exposure to Bitcoin.
Negative Points
- Total software revenues decreased by 3% year-over-year in Q4 and 7% for the full year, reflecting challenges in transitioning from on-premise to cloud services.
- Operating expenses for the software business increased by 2% year-over-year, indicating rising costs amidst revenue declines.
- The company recognized a $1 billion digital asset impairment charge in Q4, highlighting the volatility and risks associated with Bitcoin holdings.
- MicroStrategy Inc (MSTR) faces potential risks from unrealized capital gains tax on crypto assets, which could impact its growth strategy.
- The company's heavy reliance on Bitcoin exposes it to significant market volatility, which could affect its financial stability and investor confidence.
