MicroStrategy (MSTR), the largest corporate holder of Bitcoin (BTC-USD), is scheduled to announce its results for the fourth quarter of 2024 after the market closes on Wednesday, February 5. MSTR stock has risen by a massive 594% over the past year due to a Bitcoin-led rally and not because of the fundamentals of the company’s enterprise analytics software business. Analysts expect MicroStrategy to report a loss per share of $0.09 for Q4 2024 compared to an EPS (earnings per share) of $0.50 in the prior-year quarter.
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MicroStrategy’s Q4 bottom line is expected to be impacted by higher operating expenses and weakness in its software revenue. Analysts expect Q4 revenue to decline about 1.6% year-over-year to $122.45 million.
Nonetheless, investors will pay more attention to the company’s Bitcoin strategy and not the software business, as that is what is driving MSTR’s stock price higher. Interestingly, MicroStrategy uses proceeds from debt and equity issuance to buy Bitcoin and boost its Bitcoin yield (Bitcoin holdings per share). The company is expected to benefit from the increasing adoption of Bitcoin and the expectation of favorable crypto regulations under the Trump administration.
Analysts’ Views Ahead of MicroStrategy’s Q4 Results
Recently, Mizuho analyst Dan Dolev initiated coverage of MSTR stock with a Buy rating and a price target of $515. Dolev noted that the stock is trading at a premium due to the expectation that the company would continue to buy Bitcoin, and the price of Bitcoin will continue to appreciate, thanks to growing global adoption, a slowing rate of BTC supply growth, and a favorable political backdrop.
Likewise, Compass Point analyst Ed Engel initiated coverage of MicroStrategy stock with a Buy rating and a price target of $550. Engel highlighted that MSTR stock offers Bitcoin exposure to equity investors by steadily increasing its Bitcoin yield. He views MicroStrategy as “a levered play on BTC’s upward volatility,” with U.S. regulations and institutional adoption expected to boost crypto prices in 2025.
Options Traders Anticipate a Major Move on MSTR’s Q4 Earnings
Using TipRanks’ Options tool, we can see what options traders are expecting from the stock immediately after its earnings report. The expected earnings move is determined by calculating the at-the-money straddle of the options closest to expiration after the earnings announcement. If this sounds complicated, don’t worry, the Options tool does this for you.
Indeed, it currently says that options traders are expecting an 8.7% move in either direction in reaction to MSTR’s Q4 2024 results.
Is MicroStrategy a Good Buy Right Now?
Overall, Wall Street is highly bullish on MicroStrategy stock, with a Strong Buy consensus rating based on nine unanimous Buys. The average MSTR stock price target of $557.50 implies about 61% upside potential from current levels.
