MicroStrategy Incorporated (MSTR) currently holds 640,808 bitcoins, valued at approximately $70.9 billion, with an average purchase cost of $74,032 per coin. The company has achieved a 26% bitcoin yield year-to-date, nearing its annual target of 30%.
Despite the stock trading near $269.66 on Friday—up over 5% for the day—shares have fallen 37% year-to-date, even as Bitcoin hovers around $109,500. MicroStrategy’s third-quarter report revealed a slowdown in bitcoin accumulation. The company’s valuation premium, known as the mNAV multiple, narrowed to about 1.2x, the lowest level since early 2023. Analysts view this pause as cyclical rather than structural and believe MicroStrategy’s long-term model of converting investor capital into bitcoin remains intact.
### Strong Q3 Earnings and Portfolio Highlights
MicroStrategy 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 currently holds roughly 3.1% of the total bitcoin supply, with bitcoin holdings valued at about $70.9 billion at current prices.
Mizuho Securities maintained an “Outperform” rating and a $586 price target. Analysts Dan Dolev and Alexander Jenkins noted that the company’s bitcoin treasury operation continues to exceed expectations despite a cooling premium. They highlighted that MicroStrategy’s model uses market premiums and capital raises to increase bitcoin per share, a strategy sustainable as long as capital market access persists. The firm continues to model bitcoin reaching around $150,000 by the end of 2025, implying a compounded annual growth rate of roughly 20% to 25% over three years.
### New Credit Rating Unlocks Institutional Capital
TD Cowen analysts Lance Vitanza and Jonnathan Navarrete reiterated their “Buy” rating but lowered their price target to $535 from $620, citing a slower fourth-quarter start. They emphasized MicroStrategy’s new B-minus credit rating from S&P, which opens access to an additional $4.9 trillion pool of institutional capital, potentially tripling the company’s funding capacity over time.
TD Cowen also highlighted a new tax-advantaged Return-of-Capital treatment on MicroStrategy’s preferred-stock dividends, allowing investors to defer taxes indefinitely as long as they hold the shares. This feature, combined with potential overseas issuance, could boost institutional demand starting in 2026. The analysts suggested that bitcoin “maximalists” might prefer owning MicroStrategy over spot ETFs because of this setup.
During the Q3 earnings call, Executive Chairman Michael Saylor described building what he called a “credit factory”—a suite of products allowing investors to choose varying levels of bitcoin exposure. The company now offers four preferred equity offerings, each providing a different balance of risk and return, effectively creating a bitcoin yield curve.
### Valuation Offers Attractive Entry Point
Benchmark’s Mark Palmer maintained a “Buy” rating with a $705 price target, describing the dip in MicroStrategy’s mNAV multiple as a cyclical adjustment reflecting bitcoin’s maturing market and reduced volatility.
BTIG analyst Andrew Harte cut his price target to $630 from $700 but maintained a Buy rating, noting the stock offers strong upside potential for investors confident in bitcoin’s long-term growth. He pointed out that MicroStrategy’s current valuation, trading at about 1.3 times its modified net asset value, is well below its long-term average of 2.1 times.
MicroStrategy also increased its dividend rate to 10.5% for its Series A Preferred Stock during the quarter. Saylor described this development as an “inflection point” for the company as it expands its funding options.
### Consensus and Outlook
MicroStrategy enjoys a consensus Strong Buy rating among 14 Wall Street analysts, based on 13 Buys and one Sell in the past three months. The average price target of $532.84 implies a 109.31% upside from current trading levels.
Analysts remain optimistic, with Palmer noting that MicroStrategy’s management continues to see long-term potential to expand bitcoin holdings as market conditions and funding premiums improve.
https://coincentral.com/strategy-mstr-stock-why-wall-street-still-loves-this-bitcoin-play/
