On Tuesday, Benchmark analysts restated their Buy rating and $650.00 price target for MicroStrategy (NASDAQ:MSTR) shares, representing significant upside potential from the current price of $18.94. The stock has traded between $12 and $513.80 over the past 52 weeks.
The reaffirmation follows discussions at the ICR Conference in Orlando, where MicroStrategy's Executive Chairman Michael Saylor outlined the company's strategies and upcoming initiatives. InvestingPro subscribers have access to dozens more analyst ratings and detailed valuation metrics to make informed investment decisions.
Saylor detailed MicroStrategy's intention to raise capital through the issuance of perpetual preferred stock, aiming for a $2 billion capital raise via one or more offerings in the first quarter of 2025, contingent on market conditions.
This move is part of the company's broader plan to increase its Bitcoin holdings, leveraging the lack of a set maturity date of perpetual preferred stocks to create a more resilient capital structure. The timing is notable as the stock has seen a -32.57% YTD return, though recent momentum shows a positive 7.55% return over the past week.
During the conference, Saylor emphasized the potential benefits of perpetual preferred stock as a long-term capital source, reducing liquidity risk by avoiding scheduled principal repayments. He also suggested that such an instrument could offer investors leveraged exposure to Bitcoin, with returns and volatility projected at 1.5 times that of the cryptocurrency itself.
Saylor further argued that the perpetual preferred stock could revitalize what he described as a "broken" asset class, typically characterized by modest dividend yields and low volatility. By potentially making the perpetual preferred stock convertible into common shares, investors would gain access to volatility and optionality rarely seen in this market segment.
The Benchmark analyst's reiterated price target of $650 for MicroStrategy stock is based on a sum-of-the-parts analysis. This includes the projected value of the company's Bitcoin holdings by the end of 2026, a 15x multiple of its forecasted FY26 Bitcoin Yield, and the anticipated value of its software business at the same point in time.
The stock maintains robust trading activity with a 3-month average daily volume of 14.83 million shares. For comprehensive valuation analysis and additional insights, investors can access detailed metrics and ProTips through InvestingPro.
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