Business intelligence company MicroStrategy (NASDAQ:MSTR) has gained another bull this month. On Wednesday, TD Cowen analyst Lance Vitanza started coverage of MicroStrategy with a Buy rating and a price target of $520, citing the company’s exposure to Bitcoin (BTC-USD), the largest cryptocurrency by market capitalization and the optimism about its BI platform. Microstrategy shares were up 1.5% on Wednesday and have skyrocketed more than 213% year-to-date.
Pick the best stocks and maximize your portfolio:
- Discover top-rated stocks from highly ranked analysts with Analyst Top Stocks!
- Easily identify outperforming stocks and invest smarter with Top Smart Score Stocks
Earlier this month, BTIG analyst Andrew Harte initiated coverage of MicroStrategy with a Buy rating and a price target of $490, as he believes that it is the best vehicle for investors to gain exposure to Bitcoin due to several reasons, including ease of access, downside protection, and access to capital markets.
TD Cowen is Bullish on MicroStrategy
MicroStrategy’s founder Michael Saylor is considered one of the biggest Bitcoin bulls in the world. The company’s strategy is to buy and hold Bitcoin for the long term. Its core business is not impacted by near-term price fluctuations in Bitcoin. The company intends to use its excess cash and net proceeds from capital markets transactions to accumulate Bitcoin.
MicroStrategy, the largest corporate holder of Bitcoin, and its subsidiaries held about 152,333 bitcoins as of June 27, 2023, acquired at an aggregate purchase price of nearly $4.52 billion.
Vitanza thinks that the company represents a “new kind of firm,” which generates its revenue from enterprise software and cloud services but converts its excess cash flow into Bitcoin. This makes the company the best option for institutions to gain exposure to BTC.
The analyst also pointed out that while investors may directly purchase Bitcoin or gain exposure through the Bitcoin ETF, network and management fees can reduce the value of their returns.
Additionally, Vitanza believes in the prospects of the company’s flagship BI platform, given the solid enterprise spending in the cloud and continued transition to the cloud. The analyst thinks that the BI platform is apt for both on-premises and cloud. He projects recurring revenue as a proportion of total revenue, currently at 67%, to continue to grow.
Is MSTR a Good Stock to Buy?
MicrsoStrategy has a Strong Buy consensus rating based on three unanimous Buys. The average price target of $506.67 implies 14.3% upside even after the phenomenal year-to-date rally.
