Stock Analysis & Ideas

MicroStrategy Stock Could Hit $950, Says Analyst

On Tuesday, MicroStrategy (MSTR) announced Q2 earnings, but as has become customary for this company, the results took on a secondary role to the headline grabbing antics of its bitcoin activity, led of course by BTC evangelist and now former CEO Michael Saylor.

Under Saylor’s guidance, the software company has been stacking sats like there’s no tomorrow and now owns 129,699 bitcoins worth around $3 billion. But the second quarter bought a non-cash digital impairment charge of $917.8 million. An impairment charge signifies a significant decline in an asset’s recoverable value. The impairment charge for MicroStrategy’s bitcoin holdings is on account of the decrease in the price of bitcoin since MicroStrategy first bought it.

However, BTIG analyst Mark Palmer thinks the whole issue is nothing more than a storm in a BTC cup.

“We view the $917.8mm impairment charge that MSTR recognized in 2Q22, as well as all the others it has recorded since it launched its bitcoin acquisition strategy, as essentially meaningless because it has no impact on the company’s inherent value,” the analyst explained. “That value can be easily ascertained as it stems from just two sources: the market value of MSTR’s bitcoin holdings and the value of its enterprise analytics software unit.”

That was not the only headline-grabbing development. The company also announced that founder and CEO Saylor will be replaced by the company’s President Phong Le and that Saylor will take on the role of Executive Chairman.

The company’s “hodling” strategy remains intact and the reason for Saylor standing down is so he can focus his efforts wholly on the company’s bitcoin endeavors. This is not a biggie, either, according to Palmer, who believes the changes in the c-suite will have “no meaningful impact on its overall strategy or the manner in which it is executed.”

All in all, Palmer rates MSTR shares a Buy alongside a $950 price target. Should the figure be met, investors will triple their investment in a year’s time. (To watch Palmer’s track record, click here)

Overall, 2 other analysts join Palmer in the bullish camp, but they are countered by one Sell, making the consensus view here a Moderate Buy. The average price target stands at $500.67, providing room for 12-month gains of 57%. (See MicroStrategy stock forecast on TipRanks)

To find good ideas for crypto stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.

Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.

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