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Is MicroStrategy Incorporated (MSTR) Among the Best Growth Stocks to Buy and Hold in 2025?

Marcus LeeSaturday, Jan 11, 2025 8:21 pm ET

4min read

BTC -- MSTR --

MicroStrategy Incorporated (MSTR) has been making waves in the tech industry with its innovative approach to business intelligence and its bold Bitcoin (BTC) investment strategy. As we approach 2025, investors are wondering if MSTR is among the best growth stocks to buy and hold. Let's examine the factors that make MSTR an attractive investment option.

Bitcoin Investment Strategy

MSTR's strategic investment in Bitcoin has been a significant driver of its stock price. The company's Bitcoin holdings, currently over 152,000 BTC, are valued at approximately $15.2 billion at the current market price. This substantial investment in BTC serves as a financial cushion and a key driver of investor optimism. However, it's essential to note that Bitcoin's volatility poses both opportunities and risks. A sharp correction in BTC's price could expose MSTR to substantial losses, as seen in past quarters.

MSTR's Fair Value and BTC Per Share

The historical relationship between MSTR's price and BTC Value Per Share enables us to understand whether MSTR is overvalued or undervalued and defines a fair market price and a typical price range based on its current BTC per share. To take things a step further, we can create an indicator to show when MSTR is overvalued vs. undervalued based on the historical relationship between MSTR's fair value (based on BTC price and BTC per share).

MSTR's Ballistic Acceleration Model

In MSTR: The Ballistic Acceleration Model, we examined the relationship between BTC and showed a potential trajectory that would make most bulls blush. The only way for MSTR's fair value price to keep up with the Ballistic Acceleration Model in the future is for MSTR to continue increasing BTC Per Share. This requires continued ATM selling, which may increase volatility and suppress its share price in the short term.

MSTR's Valuation and Growth Potential

MSTR's valuation is more reasonable now, with a lower multiple than that of other companies selling consumer healthcare products. This gives investors in MSTR a chance to get in at a bargain price, just over $370 for each share. The company is valued at 130.71 times the FactSet consensus estimate for 2023 earnings, which is a lower multiple than that of other consumer products companies.

In conclusion, MSTR's Bitcoin investment strategy, fair value, and growth potential make it an attractive option for investors seeking growth in 2025. However, it's crucial to consider the risks associated with Bitcoin's volatility and MSTR's aggressive ATM selling strategy. As always, it's essential to conduct thorough research and consult with a financial advisor before making any investment decisions.

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