Recommendation: Buy
| Entry Date | Symbol | Recommendation | Entry Price (USD) | Target 1 (USD) | Target 2 (USD) | Holding Duration | Potential Upside* |
|---|---|---|---|---|---|---|---|
| 1 Apr, 25 | MSTR | Buy | USD 294.15 | USD 316.0 | USD 337.0 | 1 day | 14.6% |
*Potential Upside (%) indicates the expected percentage increase from the Entry Price to the Target 2 Price.
Data Powered by EOD Historical Data (“EODHD”).
MicroStrategy Incorporated provides artificial intelligence-powered enterprise analytics software and services in the United States, Europe, the Middle East, Africa, and internationally. It offers MicroStrategy ONE, which provides non-technical users with the ability to directly access novel and actionable insights for decision-making; and MicroStrategy Cloud for Government service, which offers always-on threat monitoring that meets the rigorous technical and regulatory needs of governments and financial institutions. The company also provides MicroStrategy Support that helps customers achieve their system availability and usage goals through highly responsive troubleshooting and assistance; MicroStrategy Consulting, which provides architecture and implementation services to help customers realize their desired results; and MicroStrategy Education that offers free and paid learning options. In addition, it engages in the development of bitcoin. The company offers its services through direct sales force and channel partners. It serves the U.S. government, state and local governments, and government agencies, as well as a range of industries, including retail, banking, technology, manufacturing, insurance, consulting, healthcare, telecommunications, and the public sector. The company was incorporated in 1989 and is headquartered in Tysons Corner, Virginia.
Strong Capital Raising: Raised over $17.5 billion through equity and preferred stock offerings between Q4 2024 and early 2025, significantly bolstering liquidity for strategic initiatives
Record Bitcoin Holdings: Acquired 218,887 bitcoins in Q4 2024, totaling $20.5 billion, increasing its total bitcoin holdings to approximately 447,470 as of year-end
Decline in Software Margins: Gross margin dropped from 77.3% to 71.7% year-over-year, alongside a 3.0% decline in total software revenues
Massive Operating Losses: Reported a Q4 2024 net loss of $670.8 million, compared to a net income of $89.1 million in Q4 2023, driven by $1.006 billion in impairment losses
Strategy's high financial and operational exposure to bitcoin price volatility poses a substantial risk to investor returns and earnings stability
| Entry Price | Support* | Target 1 | Target 2 |
|---|---|---|---|
| 294.15 | 261.8 | 316.0 | 337.0 |
Data Source: REFINITIV, Analysis: StockNextt
*Support can be considered as an indicative stop-loss, and if prices move below that level on closing basis individuals may evaluate exiting the position depending on their risk appetite, previous holdings, and other factors considered. The support and resistance levels may need to be re-evaluated within 4-6 weeks’ time frame depending on the stock price movements from the date of recommendation on the stock.
Record-Breaking Bitcoin Acquisitions and Capital Market Activity
In the fourth quarter of 2024, Strategy achieved its largest-ever quarterly increase in bitcoin holdings, acquiring 218,887 bitcoins at a total cost of USD 20.5 billion. This aggressive accumulation strategy continued into the first quarter of 2025, with the Company raising an additional USD 584 million through the launch and subsequent upsize of its inaugural STRK convertible preferred offering. The offering attracted significant interest from both institutional and retail investors. This strategic capital raising supports the Company's continued evolution and aggressive treasury operations in 2025, which now includes the introduction of the BTC USD Gain key performance indicator (KPI) and the adoption of fair value accounting for its bitcoin holdings.
Strategic KPIs: BTC Yield, BTC Gain, and BTC USD Gain
Strategy reported a BTC Yield of 74.3% for the full year 2024, highlighting the accretive nature of its bitcoin acquisition strategy. For 2025, the Company has revised its BTC Yield target to exceed 15% annually. The Company also reported a BTC Gain of 140,538 for 2024 and has set a target BTC USD Gain of USD 10 billion for 2025. These KPIs reflect the Company’s performance in generating shareholder value through bitcoin-related treasury operations. Definitions and methodologies for these KPIs are provided in the Company's disclosures.
Fair Value Accounting and Digital Asset Valuation
As of December 31, 2024, Strategy held approximately 447,470 bitcoins, with a carrying value of USD 23.909 billion. The original cost basis and market value of these holdings were USD 27.968 billion and USD 41.789 billion, respectively, indicating an average cost per bitcoin of USD 62,503 and a market price of USD 93,390. On January 1, 2025, the Company adopted ASU 2023-08, enabling it to report bitcoin holdings at fair value in its financial statements. This resulted in a cumulative-effect net increase of USD 12.745 billion to retained earnings, enhancing the transparency of the Company’s financial reporting.
Capital Raising through Equity and Debt Instruments
During Q4 2024, the Company raised approximately USD 15.1 billion through the sale of over 42.3 million shares of class A common stock. Between January 1 and February 2, 2025, it raised an additional USD 2.4 billion from the sale of 6.5 million shares. A further USD 4.3 billion in capacity remains under its at-the-market equity offering program. In November 2024, the Company also issued USD 3.0 billion in 0% Convertible Senior Notes due 2029. In January 2025, Strategy issued 7.3 million shares of 8.00% Series A Perpetual Strike Preferred Stock for net proceeds of USD 563.4 million.
Conversion of 2027 Notes and Increase in Share Authorization
In January 2025, Strategy announced the redemption of its USD 1.05 billion in outstanding 2027 Convertible Notes, giving noteholders the option to convert at a rate of 7.0234 shares per USD 1,000 of principal. The Company elected to fulfill conversion obligations using class A common stock and cash for fractional shares. In addition, shareholders approved a significant increase in authorized share capital, raising the number of authorized class A common shares from 330 million to 10.33 billion, and authorized preferred shares from 5 million to 1.005 billion.
Software Business and Financial Performance Highlights
Despite a 3.0% year-over-year decline in total revenues to USD 120.7 million in Q4 2024, subscription services revenues rose sharply by 48.4% to USD 31.9 million. Product license and subscription services revenues increased 18.3%, while product support and other services revenues declined by 10.8% and 20.8%, respectively. Gross profit dropped to USD 86.5 million, representing a gross margin of 71.7%, compared to 77.3% in the prior-year quarter. Operating expenses surged 693.2% year-over-year to USD 1.103 billion, driven primarily by USD 1.006 billion in digital asset impairment losses. As a result, the Company posted a net loss of USD 670.8 million for Q4 2024, or USD 3.03 per diluted share, versus net income of USD 89.1 million (USD 0.50 per share) a year earlier. Cash and cash equivalents fell from USD 46.8 million to USD 38.1 million year-over-year.
Launch of Strategy Dashboard
To enhance transparency and public access to company metrics, Strategy has launched an online dashboard at strategy.com, which will serve as a disclosure platform. The dashboard will include market data on securities and bitcoin, and provide regular updates on BTC-related KPIs, capital activity, and treasury operations.
MSTR's stock price is currently hovering near important support levels, indicating a potential for an upward reversal in the near term. The 14-period RSI remains below the midpoint, suggesting a possible rebound to the upside. Additionally, the stock is on the verge of reclaiming its 21-day Simple Moving Average, which further enhances the overall positive outlook.
Technical Commentary:
As per the above-mentioned price action, recent key business and financial updates, momentum in the stock over the last month, and technical indicators analysis, a ‘Buy’ rating has been given to MicroStrategy, Inc. (NASDAQ: MSTR) at its current market price of USD 294.15 as of April 1, 2025 (8:25 am PDT).
Data Powered by EOD Historical Data (“EODHD”).
Sector: Technology Industry: Software - Application
| Company | Change (USD) | Price (USD) | Trailing PE (x) | Forward PE (x) | Price Sales TTM (x) | Price to Book Value (x) | Enterprise Value to Revenue (x) | Enterprise Value to EBITDA (x) |
|---|---|---|---|---|---|---|---|---|
| MSTR MicroStrategy Incorporated |
-10.0418 2.41% | 406.88 | - | 1250.00 | 209.17 | 25.90 | 218.21 | -447.3154 |
| CRM Salesforce.com Inc |
-0.95 0.33% | 287.11 | 100.89 | 27.47 | 7.42 | 4.34 | 7.44 | 26.81 |
| SAPGF SAP SE |
1.60 0.53% | 301.00 | 76.28 | 22.88 | 5.61 | 3.84 | 5.59 | 26.18 |
| SAP SAP SE ADR |
1.21 0.40% | 300.48 | 75.80 | 22.37 | 5.62 | 3.75 | 5.51 | 25.79 |
| INTU Intuit Inc |
-1.615 0.24% | 669.54 | 55.56 | 32.68 | 11.28 | 10.07 | 11.62 | 40.11 |
Data Powered by EOD Historical Data (“EODHD”).
Markets are trading in a highly volatile zone currently due to certain macro-economic issues and prevailing geopolitical tensions. Therefore, it is prudent to follow a cautious approach while investing.
Related Risk: This report may be looked at from a high-risk perspective and a recommendation is provided for a short duration. This report is solely based on technical parameters, and the fundamental performance of the stocks has not been considered in the decision-making process. Other factors which could impact the stock prices include market risks, regulatory risks, interest rates risks, currency risks, social and political instability risks etc.
Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.
Target: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Target 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Target 2 may act as the crucial resistance level for the stock.
Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.
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