Strategy (MSTR), previously known as MicroStrategy, is now a leveraged Bitcoin (BTCUSD) proxy, essentially putting its enterprise analytics and mobility software business in the backseat.
Strategy began its pivot to a Bitcoin-based model under Executive Chairman Michael Saylor in August 2020. The former CEO has been very vocal about his preference for Bitcoin, calling it “digital gold” and a hedge against inflation. Now, under the watch of CEO Phong Le, the company has completely rebranded itself as a Bitcoin Treasury company.
About Strategy Stock
Strategy’s stock started gaining traction back in 2020 when the company started aggressively investing in the cryptocurrency Bitcoin. Strategy’s co-founder and then CEO Michael Saylor made headlines by announcing Bitcoin as the primary treasury reserve asset. The strategy initially started with a $250 million deal purchasing 21,454 units of BTC.
This decision paved the way for Strategy’s future transformation. Its stock started mirroring Bitcoin’s movement and during the BTC bull run in 2020 and 2021, Strategy’s stock followed with monumental gains. Strategy has greatly benefited from Bitcoin’s volatile nature in recent years with many viewing Strategy as a proxy investment for Bitcoin. Over a 5-year period the stock has gained more than 2,700%.
However, since the stock was exposed to BTC’s volatility during the bear slump in 2022, Strategy also suffered pullbacks and analysts questioned the management from all directions. Despite this, the board continued collecting BTC.
In 2023 and 2024, BTC’s price started recovering and with it, Strategy recovered. Wall Street returned to praising the company for its long-term vision in choosing Bitcoin.
Now over the past three months the stock is down 17.4% and remains nearly 45% off its 52-week high.
Strategy Disappoints in Fourth-Quarter Results
Strategy posted its fourth-quarter results on Feb. 5, reporting a loss of $670.8 million, translating to a loss of $3.03 per adjusted share. This is much worse than its net income of $0.50 per share in the prior-year period. Its revenue of $120.7 million was down 3% year-over-year, missing Wall Street estimates.
Subscription Services revenue came to $31.9 million, up 48%. Product Licenses and Subscription Services revenue increased 18.3% to $47.2 million. Product Support revenue came to $58.4 million, a 10.8% decrease, and other services came to $15.1 million, a 20.8% decline YOY.
The Bitcoin company reported an operating expense of $1.10 billion, a staggering 693% rise from last year. The increase was primarily related to impairment losses of $1 billion suffered on the company’s digital assets. During the quarter, Strategy used up $20 billion of its $42 billion capital plan while purchasing 218,887 bitcoins for $20.5 billion.
At the end of December, the company had a cash reserve of $38.1 billion with a total of 447,470 BTC valued at $23.91 billion.
Should You Buy, Sell, or Hold MSTR Stock?
Strategy’s stock is very highly rated among analysts. The stock has a consensus “Strong Buy” rating and a mean price target of $540.36, reflecting upside potential of 82% from current levels.
The stock is being monitored by 12 analysts in total with 10 giving it a “Strong Buy” rating, one giving it “Moderate Buy,” and one assigning it a “Hold” rating.
