Benchmark Supports MicroStrategy’s Bitcoin Strategy with $2,150 Price Target

Benchmark’s Strong Defense of MicroStrategy’s Bitcoin Strategy

Wall Street brokerage firm Benchmark has come out in strong support of MicroStrategy’s (MSTR) ambitious bitcoin strategy, even raising the stock’s price target to an impressive $2,150. This figure represents the highest target among analysts in the industry, despite the company’s recent report of a revenue miss for the second quarter. Since MicroStrategy adopted bitcoin as its primary treasury reserve asset in August 2020, the company—led by Executive Chairman Michael Saylor—has seen its stock appreciate a staggering 1,206%. This remarkable performance, as noted by Benchmark analyst Mark Palmer in a research report published on Friday, stands in stark contrast to bitcoin (BTC), the S&P 500, and the Nasdaq, which have seen gains of 442%, 64%, and 60%, respectively.

Palmer emphasized that while MicroStrategy’s strategy has attracted its share of critics—many of whom question why investors would choose to buy the company’s shares instead of directly investing in bitcoin—management has adeptly responded to such criticisms by pointing to their impressive results. Palmer, who maintains a buy rating on the stock, stated, “While MSTR’s approach has had plenty of detractors, including those who have asked why anyone would buy its shares rather than simply buying bitcoin, management has responded to criticism by pointing to the scoreboard.”

On Friday, shares of MicroStrategy experienced a slight decline of approximately 1.2%, yet they managed to outperform other stocks closely linked to cryptocurrency. This comes as the price of bitcoin and the broader CoinDesk 20 Index fell more than 3% in the past 24 hours. In a bold move to reinforce its commitment to bitcoin, the firm unveiled a new key performance indicator on Thursday called “Bitcoin Yield.” This metric is designed to track the percentage change in the ratio of the company’s bitcoin holdings to its diluted shares outstanding, making it easier for investors to monitor the performance of the firm’s bitcoin strategy, according to Palmer.

MicroStrategy reported a bitcoin yield of 12.2% year-to-date, as stated in the company’s earnings statement. Looking ahead, the firm aims to achieve a target of 4%-8% for each of the next three years. In its earnings report on Thursday, the company also disclosed a net loss of $102.6 million for the second quarter, largely attributed to an impairment charge of $180.1 million on its bitcoin holdings. Currently, MicroStrategy holds a total of 226,500 bitcoins, which were acquired at an average price of $36,821 per token.