Mizuho Securities has initiated coverage on data analytics company MicroStrategy (MSTR) with an Outperform rating and a $515 price target due to the company’s potential to continue buying Bitcoin. 4.2-star analyst Dan Dolev expects the price of Bitcoin to increase over time, which would push MicroStrategy’s value higher.
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As the largest corporate holder of Bitcoin, MicroStrategy’s stock is expected to benefit from its ongoing investment. According to Dolev, MicroStrategy’s ability to buy more Bitcoin and the anticipated rise in Bitcoin’s price justifies a premium valuation for the company.
This premium, which is currently around 75% higher than its underlying Bitcoin holdings, is based on the expectation that MicroStrategy will continue to acquire Bitcoin and benefit from its price appreciation. Furthermore, Dolev noted that while Bitcoin lacks intrinsic value, its rising global adoption and slowing supply growth support its potential for price appreciation.
Is MSTR a Good Stock to Buy?
Overall, analysts have a Strong Buy consensus rating on MSTR stock based on 10 Buys assigned in the past three months, as indicated by the graphic below. In addition, after a 553% surge in its share price over the past year, the average MSTR price target of $530.22 per share implies 55.63% upside potential.
