MicroStrategy executed a stock split, analysts rate it a buy due to Bitcoin holdings.

From Nasdaq Corporation
September 22, 2024 07:30:00 AM:

Veteran software firm MicroStrategy executed a 10-for-1 stock split in August after its share price surged over 100% in 2024, hitting $200. However, the split did not change the company’s overall market value. Wall Street analysts rate MicroStrategy a buy with a $194 target, attributing the growth to its Bitcoin holdings.

MicroStrategy’s core business of business intelligence software is transitioning to a subscription-based cloud computing model, seeing strong customer adoption. While this model may result in short-term revenue decreases, CEO Phong Le expects it to pay off in the long run. The company aims to achieve year-over-year revenue growth after a 12 to 18 month transition period.

MicroStrategy’s unconventional strategy of investing in Bitcoin has paid off, with stock prices rising 1,200%. However, this strategy comes with risk, as the company’s fortunes are now tied to the cryptocurrency. With a high debt ratio due to Bitcoin purchases funded by software business cash, investors must have a high risk tolerance. It’s best to reconsider investment after software business growth and balance sheet strengthening.

Read more at Nasdaq: Is MicroStrategy Stock a Buy Now?