MicroStrategy Inc. (NASDAQ: MSTR), has already delivered nearly 7x returns over the past 12 months. But a KBW Analyst is convinced that there is still significant upside potential in 2025.
Bill Papanastasiou took over MSTR coverage on Friday with a “outperform rating”.
His $560 price goal indicates that it could rise another 75% from its previous close.
The bullish call came only a few days after the company changed their name to “Strategy”, and incorporated Bitcoin in its logo, to reflect its focus towards the world’s biggest cryptocurrency.
The Nasdaq listed firm was once a business intelligence company, but has now shifted focus to become the world’s biggest corporate Bitcoin holder.
Strategy records highest-ever Bitcoin yield
This week, Strategy reported a Bitcoin yield for 2024 of 74.3% – a record that was well above the 47.3% it had achieved in 2021.
The company, based in Virginia, has also raised its BTC target from 8% to 15 % for each of the next three financial years.
Bill Papanastasiou says:
The strategy is a good proxy for leveraged Bitcoin exposure. It has additional torque from accretive Bitcoin purchase that are fueled with highly demanded security issues and a valuation above net asset value.
Note that MicroStrategy’s stock is currently down around 30% from its November high.
MicroStrategy may soon be included in S&P 500
KBW is bullish about Strategy because it could also make its way into this year’s benchmark S&P 500 Index after the Financial Accounting Standards Board announced a rule-change last year.
Businesses can now include unrealized gains related to crypto in their net income.
Analysts at Bernstein believe that MSTR could benefit from a one-time boost to its retained earnings of approximately $12.75 billion.
They also like MicroStrategy because it can take advantage of “the opportunity to generate yield on-chain through the development of applications built atop the Bitcoin network.”
However, strategy shares do not pay dividends at the time this article was written.
How did MSTR perform in Q4?
In its fiscal fourth-quarter, Strategy lost just under $3.0 per share as revenue fell about 3% year-over-year to $120.7 millions.
Analysts, on the other hand, had a 9-cent loss per share on revenue of $122.4 million.
MSTR’s recently reported quarter saw a strong performance in product licensing. Revenues from this segment were up 18.3% in the Q4 quarter.
The revenue decline of 48% in subscription services was more than offset.
MicroStrategy purchased another 218,887 Bitcoins in its fourth financial quarterly and raised $584,000,000 from its STRK convertible preferred offering.
The current price of strategy stock is $337, compared to $15 in late 2022.
This post This stock can nearly double your money by 2025 – here’s why may be updated as new information unfolds
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