Summary:
- MicroStrategy (MSTR) stock value has undergone an 87% correction from its February 2021 highs of $1,350.
- However, Wall Street analysts still believe it is a buy with a potential to rise to $950 from current levels of $180.
Since Michael Saylor revealed MicroStrategy’s Bitcoin strategy, the value of MSTR stock has been tied to the hip with BTC’s price action.
As it happens, the latter is undergoing a drawdown from its all-time high of $69k set in November 2021 to a local of $17,600 set on the 19th of this month. This translates to a 74.4% pullback in the value of Bitcoin in roughly eight months.
MicroStrategy (MSTR) Value Has Undergone an 87% Pullback from February 2021 Highs.
Similarly, MicroStrategy’s (MSTR) stock value has undergone an 87% pullback from February 2021 highs of $1,350 to its current value of $181. A glance at the daily MicroStrategy chart below reveals that MSTR is still in bear territory, trading below the 50-day (white), 100-day (yellow), and 200-day (green) moving averages.
Also, from the chart, it can be observed that the daily MACD hints at a low level of buying of MSTR. Furthermore, the neutrality of the daily MFI and RSI hint at an uncertain future for MicroStrategy stock in the traditional markets for the next few days.
Wall Street Analysts Hint MicroStrategy (MSTR) is a Buy.
However, despite the clear bearish environment facing MSTR, Wall Street analysts still believe that MicroStrategy’s stock is still a buy. According to a recent report by Bloomberg, three out of four brokerages that follow the company recommend buying its shares with an average target price of more than triple its current value.
Mark Palmer, an analyst at BTIG, explained that MicroStrategy provides investors with indirect exposure to Bitcoin, thus giving a $950 share price target for MSTR and a $95k target for Bitcoin by 2023. He said:
MicroStrategy provides equity investors in particular with not only exposure to Bitcoin, which currently they don’t have many efficient ways to access. The company also offers an operating business that generates cash with which to buy more Bitcoin.
The Bloomberg report also reiterated the earlier mentioned correlation between the price of Bitcoin and that of MicroStrategy, given the company’s dedication to holding their BTC stash. Furthermore, MSTR has been hit hard by the ongoing market drawdown, ‘slumping 69% this year’ compared to the ‘Nasdaq’s 29% decline and Bitcoin’s 55% drop.’
