Evaluating MicroStrategy (MSTR) After Recent Share Price Swings And An 81.4% Undervalued Narrative

What recent moves in Strategy (MSTR) might be telling you

Strategy (MSTR) has drawn attention after a mixed run in its share price, with a 14.96% gain over the past week contrasting with weaker returns over the month and past 3 months.

See our latest analysis for Strategy.

That 14.96% 7 day share price gain comes after a tougher stretch, with a 30 day share price return of 28.90% and year to date share price return of 21.74%. The 1 year total shareholder return of 62.14% contrasts sharply with a very large 3 year total shareholder return and a more modest 5 year total shareholder return, which suggests that momentum has recently been fading after an earlier surge.

If recent swings in Strategy have you considering where else growth stories could be building, it might be worth scanning our 16 cryptocurrency and blockchain stocks as a starting list of ideas.

So with a value score of 4, a share price of US$123 and an indicated intrinsic discount of 54.91%, is Strategy trading at a genuine discount, or is the market already factoring in all the future growth?

Most Popular Narrative: 81.4% Undervalued

According to the most followed narrative on Strategy, the last close at $123 sits well below a fair value estimate of $663, which frames the recent share price swings in a very different light.

Valuing MicroStrategy remains the ultimate $1,000,000 question. It represents a completely unique investment concept, directly tied to the performance of a highly volatile digital commodity: Bitcoin. As a leveraged beta play on Bitcoin, MicroStrategy introduces not only the inherent risks of Bitcoin’s volatility but also the amplified exposure from its aggressive financial strategies.

Read the complete narrative.

Curious how a software firm turned Bitcoin treasury vehicle lands on that kind of number? According to BlackGoat, the narrative focuses on future earnings inflection, richer margins and a premium multiple that assumes the Bitcoin playbook keeps scaling. The specific mix of growth, profitability and balance sheet assumptions is what drives that $663 figure, rather than a simple Bitcoin price guess.

Result: Fair Value of $663 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, this hinges on Bitcoin sentiment and continued access to cheap capital. A sharp Bitcoin drawdown or tighter funding could quickly challenge that 81.4% undervalued thesis.

Find out about the key risks to this Strategy narrative.

Build Your Own Strategy Narrative

If you are not fully on board with this view or simply prefer to test the assumptions yourself, you can build a custom thesis in just a few minutes by starting with Do it your way.

A great starting point for your Strategy research is our analysis highlighting 2 key rewards and 2 important warning signs that could impact your investment decision.

Looking for more investment ideas?

If you are weighing what to do next after looking at Strategy, do not stop here. The best opportunities rarely sit in the last stock you checked.

• Spot potential value early by scanning our screener containing 23 high quality undiscovered gems backed by strong fundamentals that many investors may not be watching yet.
• Prioritise capital protection with our 85 resilient stocks with low risk scores, focusing on companies that score well on resilience and overall risk profile.
• Target quality at a marked down price using our 55 high quality undervalued stocks, sourced from a list of stocks that combine robust financials with a discounted valuation.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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