From Nasdaq: 2024-06-25 09:37:00

MicroStrategy (NASDAQ: MSTR) transformed by investing $250 million in Bitcoin in 2020. As of April 2024, its Bitcoin holdings are worth $7.54 billion, a quarter of its $30 billion enterprise value. Despite slow software growth, analysts predict a 3% revenue increase by 2026. The bullish outlook relies on Bitcoin’s future value.

The company’s revenue grew slowly at 1% CAGR from 2020 to 2023. MicroStrategy expands subscription services as cloud-based competitors thrive. Analysts expect EBITDA to grow 19% CAGR from 2023 to 2026, but annual losses persist. The company’s valuation seems inflated due to its Bitcoin purchases, while risks of impairment costs remain.

MicroStrategy’s valuation heavily depends on Bitcoin’s future. With average Bitcoin purchase prices of $35,180, the company’s holdings pose unrealized gains. However, increased share count and total liabilities present risks. Analysts predict significant growth potential if Bitcoin’s price soars, possibly leading to multi-trillion-dollar company value by 2030.

MicroStrategy may face challenges in maintaining its Bitcoin-heavy strategy. While a part of its future value is tied to Bitcoin’s potential, investing directly in the cryptocurrency or Bitcoin ETF could be a safer choice for bullish investors. The company’s path to trillion-dollar status relies heavily on Bitcoin’s performance and financial strategy.

Before considering investing in MicroStrategy, investors should explore other potential options. Stock Advisor’s top 10 picks exclude MicroStrategy, with past recommendations like Nvidia showing significant returns. The service provides insights and stock picks to help build a successful portfolio. Monitoring industry trends and expert recommendations helps in making informed investment decisions.

Read more at Nasdaq: Will MicroStrategy Be a Trillion-Dollar Stock by 2030?