MicroStrategy stock set to gain 30% if BTC hits $150K in 2025 — Analyst

Alex O’Donnell2 hours agoMicroStrategy stock set to gain 30% if BTC hits $150K in 2025 — AnalystThe valuation assumes continued aggressive Bitcoin buying by MicroStrategy.1057 Total views6 Total sharesListen to article 0:00NewsOwn this piece of crypto historyCollect this article as NFTCOINTELEGRAPH IN YOUR SOCIAL FEEDFollow ourSubscribe onShares of MicroStrategy are set for 30% gains if Bitcoin (BTC) climbs to $150,000 by the end of 2025, according to an Aug. 2 analyst report shared with Cointelegraph.

The stock could reach $2,150 per share if MicroStrategy sustains the BTC buying spree started by founder Michael Saylor in 2020, according to Benchmark fintech analyst Mark Palmer. It currently trades at around $1,450.

“Our valuation assumes that [MicroStrategy] will continue to aggressively accumulate Bitcoin during the next 1.5 years and that Bitcoin’s price will reach $150,000” by the end of 2025, Palmer told Cointelegraph in an email.

Related:MicroStrategy’s Q2 earnings reveals Bitcoin stockpile now $14.7B

On its Aug. 1 earnings call, MicroStrategy doubled down on BTC buying by committing to a unique performance metric: Bitcoin yield.Revenues from MicroStrategy’s core business are down 7% year-over-year. Source: MicroStrategy

Bitcoin yield measures the ratio of BTC holdings to outstanding shares and effectively sets BTC-per-share as a lodestar for corporate performance. The idea is to "demonstrate the efficacy of its bitcoin acquisition strategy and its use of intelligent leverage,” Palmer said.

“While [MicroStrategy’s] approach has had plenty of detractors, […] management has responded to criticism by pointing to the scoreboard: since the company adopted its bitcoin acquisition strategy on August 10, 2020, the company’s stock has appreciated by 1,206%,” the report said, adding that MicroStrategy greatly outperformed both BTC and stocks during that time frame.

Benchmark’s “buy” rating is “based on a sum-of-the-parts analysis that combines (1) our estimate of the year-end 2025 value of the company’s Bitcoin holdings and (2) our estimate of the year-end 2025 value of its enterprise software business,” Palmer said.

MicroStrategy traded down some 10% since its investor call after posting losses of $5.74 per share, driven by declining revenue in its core enterprise software business. 

Despite the weak quarter, MicroStrategy still scooped up 12,222 BTC for $805 million — or around $65,800 per coin — financed from “cash flows, as well as proceeds from equity and debt financings,” CEO Phong Q. Le said on the call.

It now owns a stockpile of 226,500 BTC, worth around $14.7 billion at current prices.

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