Shares of crypto-crazed software company MicroStrategy (MSTR) fell in today’s trading despite receiving an Overweight rating from Barclays. The UK-based bank likes how the company is using profits from its software business to build up a $13 billion Bitcoin reserve. Indeed, analyst Ramsey El-Assal compared MicroStrategy to a Bitcoin index fund that also generates its own cash, giving investors a way to tap into both Bitcoin’s price moves and future BTC accumulation from MSTR.
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El-Assal also highlighted a few things he likes about MicroStrategy. To begin with, the firm offers a unique way for investors to gain Bitcoin exposure and has a strong strategy for building up its BTC reserve. Furthermore, it is capitalizing on the demand for cutting-edge technology through its enterprise analytics and mobility software. El-Assal noted that the shift toward subscription services could lead to higher recurring revenue.
However, the analyst did list some risks associated with the company. These include Bitcoin’s volatility due to its role as the company’s primary treasury reserve, liquidity risks from its debt-financed BTC purchases, potential crypto regulation, and broader macroeconomic pressures. Still, El-Assal remains optimistic, with a $146 per share price target.
Is MicroStrategy a Buy?
Overall, analysts have a Strong Buy consensus rating on MSTR stock based on eight Buys assigned in the past three months. Over the past year, MSTR has increased by a whopping 227%, and the average MSTR price target of $216.63 per share implies an upside potential of 87.57% from current levels.
