MicroStrategy Halts Bitcoin Buying Spree Ahead of Q4 Loss

MicroStrategy, the leading corporate holder of Bitcoin, has halted its Bitcoin buying streak, sparking speculation among investors and analysts. The company, which has seen its stock price surge by 594% over the past year due to a Bitcoin-led rally, is expected to report a loss per share of $0.09 for Q4 2024, compared to an EPS of $0.50 in the prior-year quarter.

Analysts anticipate that MicroStrategy's Q4 bottom line will be impacted by higher operating expenses and weakness in its software revenue. Despite this, investors are likely to focus more on the company's Bitcoin strategy, as it has been the primary driver of MSTR's stock price. MicroStrategy has been using proceeds from debt and equity issuance to buy Bitcoin and boost 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.

In the lead-up to MicroStrategy's Q4 results, analysts have offered their views on the company's stock. 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 would continue to buy Bitcoin, and the price of Bitcoin would continue to appreciate. 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.

Options traders are anticipating a major 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 significant volatility around the earnings announcement.

Wall Street analysts are highly bullish on MicroStrategy stock, with a Strong Buy consensus rating based on nine unanimous Buys. The average MSTR stock price target of $557.50 implies about 61% upside potential from current levels.