Strategy (MSTR) Stock: Why Wall Street Still Loves This Bitcoin Play

TLDR

• Strategy holds 640,808 Bitcoin worth approximately $70.9 billion with an average purchase cost of $74,032 per coin
• The company achieved a 26% bitcoin yield year-to-date, approaching its 30% annual target
• Strategy’s new B-minus credit rating from S&P opens access to a $4.9 trillion institutional capital pool
• Analysts maintain Buy ratings with price targets ranging from $535 to $705, seeing current weakness as cyclical
• New tax-advantaged preferred stock structure could boost institutional demand in 2026

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Strategy shares traded near $269.66 on Friday, up over 5% for the day. The stock has fallen 37% year-to-date despite bitcoin hovering around $109,500.

MicroStrategy Incorporated, MSTR

The company’s third-quarter report showed a slowdown in bitcoin accumulation. The valuation premium, known as the mNAV multiple, narrowed to about 1.2x, the lowest level since early 2023.

Analysts covering the stock said the pause appears cyclical rather than structural. They believe the company’s long-term model of converting investor capital into bitcoin remains intact.

Strategy reported third-quarter earnings of $8.42 per share, beating estimates of $7.90. Revenue came in at $128.7 million, topping forecasts of $116.35 million.

The company now holds 640,808 BTC, equal to roughly 3.1% of total bitcoin supply. At current prices, the holdings are valued at approximately $70.9 billion.

Mizuho Securities kept an “Outperform” rating and $586 price target. Analysts Dan Dolev and Alexander Jenkins said the bitcoin treasury operation continues to outperform expectations despite a cooling premium.

The firm noted Strategy’s model uses market premiums and capital raises to accrete bitcoin per share. This remains sustainable as long as access to capital markets persists.

Strategy continues to model bitcoin reaching about $150,000 by the end of 2025. Mizuho notes this would imply a three-year compounded growth rate of roughly 20% to 25%.

New Credit Rating Opens Institutional Doors

TD Cowen’s Lance Vitanza and Jonnathan Navarrete reiterated a “Buy” rating but cut their price target to $535 from $620. They cited a slower fourth-quarter start for the adjustment.

The firm highlighted Strategy’s recent B-minus credit rating from S&P. This opens access to an additional $4.9 trillion pool of institutional capital, potentially tripling funding capacity over time.

TD Cowen also pointed to new Return-of-Capital tax treatment for Strategy’s preferred-stock dividends. This allows investors to defer taxes indefinitely as long as they hold the shares.

The company now has four preferred equity offerings. Each gives investors a different balance of risk and return, effectively building a bitcoin yield curve.

Valuation Creates Entry Point

Benchmark’s Mark Palmer maintained a “Buy” rating and $705 price target. He described the dip in Strategy’s mNAV multiple as cyclical, reflecting bitcoin’s maturing market and easing volatility.

BTIG analyst Andrew Harte cut his price target to $630 from $700 but kept a Buy rating. He said the stock still offers strong upside for investors confident in bitcoin’s long-term growth.

Harte noted Strategy’s valuation looks attractive, trading at about 1.3 times its modified net asset value. This sits well below its long-term average of 2.1 times.

Strategy increased its dividend rate to 10.5% for its Series A Preferred Stock during the quarter. Saylor called this an “inflection point” for the company as it expands funding options.

Strategy has a consensus Strong Buy rating among 14 Wall Street analysts. That rating is based on 13 Buys and one Sell assigned in the past three months.

The average MSTR price target of $532.84 implies a 109.31% upside from current levels. Palmer added that management continues to see long-term potential to expand bitcoin holdings as market conditions and funding premiums improve.

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