US LNG exports surge but will buyers in China turn up?
On Monday, Benchmark reaffirmed its Buy rating on shares of MicroStrategy (NASDAQ:MSTR) with a price target of $650, representing significant upside from the current price of $408.67. The stock has already delivered an impressive 547% return year-to-date, according to InvestingPro data.
The firm's analysis is based on a sum-of-the-parts valuation, which includes the projected value of the company's bitcoin holdings at the end of 2026, a 15x multiple of its anticipated FY26 Bitcoin Yield, and the projected value of its software business at the same time. The valuation assumes that the price of bitcoin will reach $225,000 by the end of 2026 and that MicroStrategy will have accumulated 615,650 bitcoins by then.
The analyst from Benchmark highlighted that MicroStrategy's potential inclusion in the Nasdaq-100 index could be a near-term positive event for the company's stock. Furthermore, the possibility of being added to the S&P 500 index is seen as an even more significant medium-term opportunity.
While MicroStrategy currently meets the S&P 500's market cap and trading volume requirements, it falls short on a couple of other criteria, including the need for positive earnings in the most recent quarter and over the last four consecutive quarters.
MicroStrategy has not met these earnings criteria, but the company has indicated plans to adopt new Financial Accounting Standards Board (FASB) guidance for the accounting treatment of bitcoin on corporate balance sheets starting in the first quarter of 2025. This change is expected to allow the company to report positive earnings immediately.
The adoption of the new FASB guidance is seen as a strategic move for MicroStrategy, positioning it to meet the S&P 500 inclusion criteria. This could potentially enhance the attractiveness of MicroStrategy's stock to a broader range of institutional investors and index funds that track the S&P 500.
MicroStrategy's strategy has been heavily focused on bitcoin acquisition and holding, which differentiates it from other software companies. The company's performance and the valuation of its stock are closely tied to the price movements of bitcoin, making its stock an indirect investment vehicle for the cryptocurrency.
InvestingPro analysis reveals the stock's high beta of 3.2, indicating significant volatility, while additional ProTips highlight important insights about the company's financial health and valuation. Discover 14 more exclusive ProTips and access comprehensive analysis through InvestingPro's detailed research reports.
In other recent news, MicroStrategy Incorporated has been maintaining a strong focus on its Bitcoin acquisition strategy. The company recently purchased approximately 15,400 bitcoins for about $1.5 billion, funded through the sale of class A common stock. This has increased MicroStrategy's total Bitcoin holdings to approximately 423,650 bitcoins.
The possibility of MicroStrategy's inclusion in the Nasdaq100 index has been highlighted by Bernstein and Bloomberg Intelligence, a development that could lead to significant market participation. This potential inclusion is also seen as a precursor to the company's consideration for the S&P 500 index by 2025.
Analyst firms such as Barclays (LON:BARC), Canaccord Genuity, and BTIG have maintained positive ratings on MicroStrategy's stock, with Bernstein maintaining an Outperform rating and a price target of $600.00. These are recent developments that investors should consider.
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