Wall Street brokerage Benchmark has increased its price target for MicroStrategy to $2,150, despite the company missing revenue expectations in the second quarter. The analyst from Benchmark pointed out that MicroStrategy’s stock has been performing exceptionally well ever since it adopted bitcoin as its primary treasury reserve asset in August 2020. In fact, the stock has outperformed assets like bitcoin, S&P 500, and Nasdaq by a significant margin.
Even though MicroStrategy’s approach of investing in bitcoin has faced criticism from some, the company has seen tremendous growth, appreciating by 1,206% since the adoption of bitcoin. Benchmark’s analyst, Mark Palmer, who maintains a buy rating on the stock, highlighted this impressive growth in a recent research report.
Despite reporting a net loss of $102.6 million in the second quarter due to an impairment charge on its bitcoin holdings, MicroStrategy remains committed to its bitcoin strategy. The company introduced a new key performance indicator called “Bitcoin Yield,” which tracks the change in the ratio of the company’s bitcoin holdings to its diluted shares outstanding. This metric aims to provide investors with a clearer view of the firm’s bitcoin strategy performance.
MicroStrategy’s bitcoin yield for the year-to-date stands at 12.2%, and the company aims for a yield of 4%-8% in the next three years. With a current holding of 226,500 bitcoins acquired at an average price of $36,821 per token, the firm continues to bet big on the leading cryptocurrency.
Despite the revenue miss and net loss reported in the second quarter, Benchmark remains bullish on MicroStrategy’s future prospects and has set a high price target for the stock. The company’s focus on bitcoin as a treasury reserve asset seems to be paying off, with the stock outperforming other assets in the market.
As the cryptocurrency market experiences fluctuations, MicroStrategy’s unwavering commitment to its bitcoin strategy sets it apart from other companies. The introduction of the Bitcoin Yield metric provides investors with a transparent way to evaluate the company’s performance in the crypto space.
In conclusion, MicroStrategy’s bold move to adopt bitcoin as a primary treasury reserve asset continues to generate positive results, despite some setbacks. With Benchmark raising its price target for the stock, the company’s long-term outlook remains optimistic, reflecting confidence in its bitcoin strategy and potential for future growth.