"MicroStrategy's Bitcoin Bet: Q4 Results Set to Shake Crypto Market"

MicroStrategy (MSTR), the world's largest corporate holder of Bitcoin (BTC-USD), is set to announce its fourth-quarter 2024 results after the market closes on Wednesday, February 5. The company's stock has surged by 594% over the past year, primarily driven by a Bitcoin-led rally, rather than the fundamentals of its enterprise analytics software business. Analysts anticipate a loss per share of $0.09 for Q4 2024, compared to an EPS of $0.50 in the prior-year quarter.

MicroStrategy's bottom line is expected to be impacted by higher operating expenses and weakness in its software revenue. Analysts project Q4 revenue to decline about 1.6% year-over-year to $122.45 million. However, investors are likely to focus more on the company's Bitcoin strategy, as it has been the primary catalyst for MSTR's stock price appreciation. MicroStrategy uses proceeds from debt and equity issuance to purchase Bitcoin, thereby boosting its Bitcoin yield (Bitcoin holdings per share). The company is expected to benefit from the increasing adoption of Bitcoin and favorable crypto regulations under the Trump administration.

Recently, Mizuho analyst Dan Dolev initiated coverage of MSTR stock with a Buy rating and a price target of $515. Dolev noted that the stock is trading at a premium due to expectations that the company will continue to buy Bitcoin, and the price of Bitcoin will continue to appreciate, thanks to growing global adoption, a slowing rate of BTC supply growth, and a favorable political backdrop. Similarly, Compass Point analyst Ed Engel initiated coverage of MicroStrategy stock with a Buy rating and a price target of $550. Engel highlighted that MSTR stock offers Bitcoin exposure to equity investors by steadily increasing its Bitcoin yield and views the company as a levered play on BTC's upward volatility, with U.S. regulations and institutional adoption expected to boost crypto prices in 2025.

Options traders anticipate a significant move on MSTR's Q4 earnings, with an expected 8.7% move in either direction in reaction to the results. This suggests that investors are positioning themselves for a substantial price swing following the earnings announcement.

Wall Street analysts are overwhelmingly bullish on MicroStrategy stock, with a Strong Buy consensus rating based on nine unanimous Buy ratings. The average MSTR