MicroStrategy stock popped early Monday on a series of hefty price target hikes as Michael Saylor’s software company continues its bitcoin buying spree. Meanwhile, bitcoin continues to trade under $100,000 after notching another record late last week.
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Canaccord on Monday morning raised its price target on MicroStrategy (MSTR) stock to 510 from 300 and kept a buy rating on the shares, The Fly reported. The research firm noted that MicroStrategy is the best-performing stock across the Fortune 500 since implementing its bitcoin acquisition in the summer of 2020, with a 2,800% gain over the period. Canaccord said it introduced a new valuation framework for MicroStrategy, because the traditional earnings metrics no longer really apply to the company.
MicroStrategy’s traditional software business now only accounts for a single-digit percentage of its current enterprise value, the analysts wrote. Meanwhile, MicroStrategy is using its equity and convertible debt while exploiting its equity premium, which allows its bitcoin holdings to outpace the dilution of its share count, Canaccord noted.
MicroStrategy announced in its Q3 results at the end of October plans to raise $42 billion to buy more bitcoin over the next three years. The company plans to raise $21 billion of equity and $21 billion of fixed income securities, called its “21/21 Plan.”
As part of that plan, Chairman Michael Saylor said Monday that MicroStrategy acquired 55,500 bitcoin for around $5.4 billion, following another $4.6 billion purchase earlier in the month. As of Nov. 25, MicroStrategy holds 386,700 bitcoin with an average price of about $56,761 per coin.
Bernstein on Monday also hoisted its price target for MicroStrategy stock, calling its bitcoin treasury model unprecedented on Wall Street. MicroStrategy is on an “insatiable path” to attract billions in global capital to invest in bitcoin, Bernstein wrote, and expects it to own 4% of the world’s bitcoin over the next decade. The firm raised its price target on MSTR stock to 600 from 290 and maintained an outperform rating on the shares.
Elsewhere, Barclays on Monday also raised its price target on MicroStrategy to 515 from 275 and kept an overweight rating on the shares after updating the company model.
MicroStrategy Stock, Bitcoin Price Action
MSTR stock surged 3.9% premarket Monday on the upgrades. Shares rallied nearly 24% last week as bitcoin trended higher.
MicroStrategy stock has vaulted nearly 568% so far this year and is trading at record highs.
Meanwhile, bitcoin traded around $97,500 Monday morning as it continues to hover near the coveted $100,000 price level. Bitcoin on Friday peaked at a new record high of $99,768 before sliding below $96,000 on Sunday.
The world’s top cryptocurrency is up about 133% in 2024.
Among other crypto stocks, Coinbase (COIN) rose 2.2% early Monday.
The iShares Bitcoin Trust (IBIT) and other spot bitcoin ETFs eased about 1%, set to dip from record highs after last week’s rally.
Bitcoin miners generally traded higher. MARA Holdings (MARA) led the group with a 4.7% gain.
You can follow Harrison Miller for more stock news and updates on X/Twitter @IBD_Harrison
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