MicroStrategy’s stock has skyrocketed by about 540% this year, making it one of the top-performing stocks of 2023.
Quarter to date, $MSTR's treasury operations delivered a BTC Yield of 35.2%, providing a net benefit of ~88,820 BTC to our shareholders, or ~1586 BTC per day. At $92K per BTC, that would equate to $8.2 billion for the quarter so far, or $146 million per day.
— Michael Saylor⚡️ (@saylor) November 26, 2024
The company’s shares have surged roughly 2,800% since it began its strategic Bitcoin acquisition plan in the summer of 2020. Joseph Vafi, a top Wall Street analyst from Canaccord, believes there is still room for MicroStrategy’s stock to grow.
The money is great, but the mission is even greater. #Bitcoinpic.twitter.com/UmWoUgV8fX
— Michael Saylor⚡️ (@saylor) November 25, 2024
He notes that the company’s valuation is unique because its stock price is mainly driven by the value and sentiment around its Bitcoin holdings. Vafi says MicroStrategy’s Bitcoin-focused strategy has created significant shareholder value and shows a forward-thinking approach. However, traditional valuation metrics like EV/EBITDA no longer apply since its software business is only a small part of its overall enterprise value.
COO @brunocaratori joined @CNBC Crypto World to discuss bitcoin, the future of a "pro crypto" US administration and more.. Have a watch! https://t.co/8OJEyTBHgH
— Hashdex (@hashdex) November 26, 2024
MicroStrategy’s Bitcoin-driven stock gains
The analyst suggests a new way to assess MicroStrategy’s value creation, focusing on Bitcoin accretion per share and the Bitcoin yield KPI. This method shows that MicroStrategy has grown its Bitcoin holdings faster than its share count by using both equity and convertible debt.
B.B. – Before #Bitcoin, 2008 A.D.
0 A.S. – Anno Singulari, in the year of the sovereign individual, Block 0, JAN 3 2009 A.D.
We are now in 15 A.S.
— Samson Mow (@Excellion) November 25, 2024
As of November 18, MicroStrategy’s 2024 year-to-date Bitcoin yield was 41.8%, showing a substantial increase in Bitcoin holdings per share. This growth, along with gains in the spot price of Bitcoin, leads to significant “dollarized” accretion per share not reflected in the profit and loss statement. Vafi has given MicroStrategy shares a Buy rating and increased his price target from $300 to $510, suggesting a 26% upside from current levels.
The stock has a Strong Buy consensus rating based on eight unanimous Buy recommendations. The average price target of $494 implies the shares will increase around 22% over the next 12 months.
