The brokerage firm increased the year-end target price for the software developer’s stock from $1875 to $2150.
Benchmark, a Wall Street brokerage firm, defended MicroStrategy’s (MSTR) Bitcoin plan and raised the stock’s target price to $2150—the highest among analysts—even after the company reported a revenue decline in the second quarter.
Since adopting Bitcoin as its primary treasury reserve asset in August 2020, the company, led by Executive Chairman Michael Saylor, has seen its value increase by 1206%, noted Benchmark analyst Mark Palmer in a research report on Friday. During this period, the stock’s performance has significantly outpaced Bitcoin (BTC), the S&P 500, and Nasdaq, which rose by 442%, 64%, and 60%, respectively.
“Despite many detractors questioning why someone would buy its stock instead of just buying Bitcoin, the management responded to the criticism by pointing to the scoreboard,” said Palmer, who has a buy rating on the stock.
MicroStrategy shares fell about 1.2% on Friday, outperforming other cryptocurrency-related stocks. The price of Bitcoin and the broader CoinDesk 20 index dropped more than 3% in the past 24 hours.
Doubling down on its Bitcoin strategy, the company on Thursday introduced a new key performance indicator—“Bitcoin yield,” which tracks the percentage change in the ratio of the company’s Bitcoin holdings to its diluted shares outstanding. According to Palmer, this new metric will make it easier for investors to track the effectiveness of the company’s Bitcoin strategy.
MicroStrategy’s Bitcoin yield year-to-date was 12.2%, according to the company’s earnings report. The company targets a 4-8% yield each of the next three years.
On Thursday, the firm reported a net loss of $102.6 million for the second quarter, as it took a $180.1 million impairment on its Bitcoin holdings. The company currently holds 226,500 Bitcoin, acquired at an average price of $36,821 per token.
