As a seasoned analyst with over two decades of experience in the tech and finance industries, I find MicroStrategy’s (MSTR) current valuation intriguing. While it may seem counterintuitive to some that MSTR trades at a 2.3x premium to its Bitcoin (BTC) portfolio NAV, I see potential for further gains.
According to a recent analyst report, MicroStrategy’s (MSTR) shares are expected to continue rising, despite the stock currently being valued at twice its Bitcoin (BTC) portfolio’s net asset value (NAV). This information was shared by CryptoMoon.
As an analyst, I posit that MicroStrategy’s stock (MSTR) could potentially reach $245 per share if the company persists in utilizing its financial resources to acquire more Bitcoin and begins lending out this digital currency for low-risk returns, as suggested by Benchmark fintech analyst Mark Palmer.
Presently, MicroStrategy shares are being traded approximately at $206. However, analyst Palmer has revised his projected price for MicroStrategy upward, now suggesting a target of $215.
In a recent statement, Palmer noted that the gap between the share price of Mastercard (MSTR) and its net asset value (NAV) has widened this year, leading to an increase in those who question whether the stock should trade at such high levels.
Nevertheless, it seems some people think MSTR’s valuation should closely match its Net Asset Value (NAV). However, this view may not fully consider the powerful engine for shareholder value that the company has developed since initiating its Bitcoin acquisition strategy in August 2020,” he pointed out.
Currently, by September, MicroStrategy owns over a quarter-million Bitcoins, which are estimated to be valued at around $17 billion as of October 18th.
Currently, the market value of MSTR shares is roughly around $42 billion, as reported by Yahoo Finance.
On its August 1st earnings conference, MicroStrategy reinforced its commitment to Bitcoin investments by adopting an uncommon evaluation measure: Bitcoin return on investment (ROI).
The Bitcoin yield represents the relationship between Bitcoin holdings and the total number of shares issued, thereby using the amount of Bitcoin per share as a benchmark for corporate success.
According to Palmer, the company has revealed that its Bitcoin Return for the year up until September 19th was a substantial 17.8%. This figure surpasses the Bitcoin Returns of 1.8% and 7.3% they achieved in 2022 and 2023 respectively.
On September 24th, Palmer advised that MicroStrategy might explore the option of earning interest by lending part of its Bitcoin reserves.
[MSTR] can potentially boost its share prices by capitalizing on opportunities between US stocks and Bitcoin, particularly during what is expected to be a rising market for cryptocurrency, according to Palmer’s statement to CryptoMoon via email.
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2024-10-18 19:00