MicroStrategy (MSTR) Valuation in Focus as Market Cap Dips Below Bitcoin Holdings and Leverage Risks Rise

Strategy (MSTR) has reached a rare milestone, with its market capitalization dipping below the value of its Bitcoin holdings. This shift highlights investor caution regarding the company’s leveraged structure and ongoing equity raises to fund additional Bitcoin purchases.

See our latest analysis for Strategy.

Strategy’s share price has tumbled in dramatic fashion this year, with a 31% slide over the past month alone and a 33% loss year-to-date as crypto volatility and heavy fundraising have weighed on sentiment. The 41% one-year total shareholder return loss underlines the scale of the recent selloff, even as the company continues to double down on its Bitcoin accumulation and fundraising efforts. While short-term momentum is clearly fading, it is worth noting that longer-term holders are still up over 1,000% in just three years, which highlights the stock’s wild ride and high-octane risk profile.

If recent swings in Strategy have you rethinking your approach, it could be the ideal moment to broaden your outlook and discover fast growing stocks with high insider ownership

So after a remarkable reversal in the trading premium, is Strategy now trading at a true discount to its assets, offering investors a rare entry point? Or is the market simply pricing in all future risks and growth?

Most Popular Narrative: 69.9% Undervalued

According to the most-followed narrative by BlackGoat, Strategy’s estimated fair value is $663 per share, which is a dramatic difference compared to its recent closing price below $200. This sets the stage for a deeply contrarian thesis, along with some bold assumptions driving the number.

Assuming Bitcoin appreciates to $300,000 within the next few years, and MSTR partially executes the 21/21 plan, MicroStrategy’s fair value could reach $663 per share, with the potential for higher prices during speculative peaks. For Buy-and-Hold investors, this is not a stock for the faint-hearted. Over the next decade, MicroStrategy’s performance will demand extraordinary resilience. The stock’s volatility will test even the strongest long-term convictions, making it a challenging hold for those without a deep belief in Bitcoin’s sustained growth.

Read the complete narrative.

Are you ready to see what’s really powering this sky-high estimate? Dive in to uncover the headline-grabbing assumptions, ranging from Bitcoin moonshots to aggressive capital plans and bold margin targets. The full narrative unpacks the specific moves and market math supporting this target price. Don’t miss the inside track to the numbers behind the story.

Result: Fair Value of $663 (UNDERVALUED)

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

However, a sharp downturn in Bitcoin or tightening liquidity across treasury peers could quickly undermine this bullish case and put Strategy’s valuation under renewed pressure.

Find out about the key risks to this Strategy narrative.

Build Your Own Strategy Narrative

If you want to test these forecasts or take a different viewpoint, you can dive into the data yourself and assemble your own story in just a few minutes with Do it your way.

A great starting point for your Strategy research is our analysis highlighting 4 key rewards and 2 important warning signs that could impact your investment decision.

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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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