Strategy (MSTR) has been one of the market’s biggest Bitcoin proxy plays. The stock is up about 160% over the past year, though it has cooled in recent weeks alongside Bitcoin’s price swings. Despite the volatility around Bitcoin, Canaccord Genuity’s Top analyst, Joseph Vafi, reiterated a Buy rating on the stock with a price target of $464. The price target implies about 36% upside potential from current levels.
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Why Vafi Sees Upside for MSTR Stock
The 5-star analyst highlighted Strategy’s preferred stock sales as a key driver of shareholder value. The company has raised more than $6 billion this year through these offerings, which he called “among the most successful in U.S. capital markets history.” Unlike past funding moves, these deals boosted the company’s Bitcoin-per-share while avoiding dilution for common shareholders.
Vafi also noted that Strategy’s Bitcoin yield has already hit 25% this year, running ahead of management’s earlier guidance. Meanwhile, the dividend obligations tied to the preferred stock are modest, about 2.3% of the money raised, so the company can pay them even if Bitcoin’s price swings.
New Accounting Rule Brings More Clarity
Vafi welcomed the new U.S. accounting rule (ASU 2023-08), which introduces fair-value accounting for crypto assets. This means companies like Strategy must now report their Bitcoin at current market value each quarter. He sees the change as a positive step, giving investors a clearer view of how Bitcoin’s price swings affect earnings.
If Bitcoin climbs to $150,000 by year-end, management estimates that could translate into about $24 billion in net income. While Bitcoin’s volatility remains the biggest risk, Vafi still calls Strategy “one of the most innovative companies” under his coverage and expects more firms to adopt its Bitcoin-driven treasury strategy.
Is MSTR Stock a Buy?
The stock of Strategy has a consensus Strong Buy rating among 13 Wall Street analysts. That rating is based on 12 Buy and one Sell recommendations assigned in the last three months. The average MSTR price target of $567.23 implies 65.83% upside from current levels.
