MicroStrategy (MSTR) lost another 11% on Tuesday, Feb. 25 after the price of Bitcoin (BTCUSD) tanked to a new three-month low of about $87,000.
The $1.5 billion Bybit hack on Feb. 21 has weighed rather significantly on the world’s largest cryptocurrency, pulling with it the shares of Virginia-based MicroStrategy.
In total, the Nasdaq-listed firm has tanked some 24% over the past five days. Still, analysts remain rather bullish on MSTR, indicating the recent pullback may be an opportunity to buy the dip.
MicroStrategy Remains Bullish on Bitcoin
MicroStrategy shares may be worth buying on the recent weakness as the company itself expects the ongoing pressure on Bitcoin to prove only temporary.
The business intelligence firm turned Bitcoin proxy capitalized on the recent pullback by loading up on nearly $2 billion worth of BTC. Its executive chairman Michael Saylor even expects Bitcoin to eventually hit $5 million in valuation.
Historically, when the price of Bitcoin recovers, it drives with it the price of MSTR shares as well. And while past performance is not indicative of future returns, if MicroStrategy stock retains its correlation with BTC, chances are that it will quickly regain the lost ground in the weeks ahead.
MSTR Shares Could More Than Double From Here
On Tuesday, investment firm KBW also recommended buying MicroStrategy stock on the recent pullback.
Its analyst Bill Papanastasiou assumed coverage of the Bitcoin proxy with a “Buy” rating and a $560 price target that indicates potential upside of more than 120% from current levels.
In his research note, Papanastasiou dubbed MSTR an attractive investment for levered Bitcoin exposure as the updated Financial Accounting Standards Board (FASB) rules now enable it report its BTC holdings at fair market value.
FASB’s updated rules could be a meaningful tailwind for MicroStrategy’s net income, which makes it a strong candidate for inclusion in the S&P 500 Index ($SPX), the analyst added.
Other Analysts Agree With KBW on MicroStrategy
The rest of Wall Street seems to agree with KBW’s view on MicroStrategy stock.
The consensus rating on it currently sits at “Strong Buy” with the mean target of $540.36 indicating potential upside of well over 100% from here.
