Microstrategy's Price Target Cut by TD Cowen Analyst Following Bitcoin Acquisition

TD Cowen's Lance Vitanza lowered their price target on Microstrategy (NASDAQ: MSTR) by 7.1% from $1,560 to $1,450 on 2024/03/20. The analyst maintained their Buy rating on the stock.

Vitanza's price target cut was catalyzed by another Microstrategy acquisition, 9,245 Bitcoin for $623M, purchased with cash on hand and funds from its recent convertible note sale. This move by the company may have raised concerns about its liquidity and financial position, prompting Vitanza to revise the price target downwards.

However, despite the price target cut, TD Cowen still sees Microstrategy as an attractive investment opportunity for those looking to gain exposure to Bitcoin. According to the analyst, "Microstrategy's stock remains an attractive vehicle for investors looking to gain Bitcoin exposure."

It's worth noting that 100% of the top-rated analysts currently rate MSTR as a Strong Buy or Buy. No analysts consider it a Hold, and none recommend or strongly recommend selling the stock. This indicates a bullish sentiment among the analyst community regarding Microstrategy's future prospects.

Looking at the consensus forecast among analysts, it is projected that Microstrategy's upcoming year will deliver earnings per share (EPS) of $3.89. If these analysts are correct, it would mean a significant decrease of 87.6% in yearly EPS on a year-over-year basis. Such a decline could be a cause for concern for investors.

Despite the potential EPS decline, Microstrategy's stock price has been performing exceptionally well. Since the company's last quarterly report on 2023/12/31, the stock price has surged by 153.2%. On a year-over-year basis, the stock has skyrocketed by a staggering 485%. These impressive gains have outpaced the performance of the broader market, with MSTR outpacing the S&P 500, which has risen by 30.9% during the same period.

TD Cowen analyst Lance Vitanza, who made the price target cut, is ranked by WallStreetZen in the top 4% out of 4,518 Wall Street analysts. Vitanza has an impressive track record, with an average return of 65% and a win rate of 63.6%. The analyst specializes in the Communication Services and Basic Materials sectors, among others.

MicroStrategy Incorporated provides enterprise analytics software and services worldwide. The company's flagship product, MicroStrategy, offers a modern analytics experience by delivering insights across multiple devices to users through hyperintelligence products, visualization and reporting capabilities, mobility features, and custom applications. Additionally, the company provides support and consulting services to help customers achieve their system availability and uptime goals and improve their overall experience. MicroStrategy serves a wide range of industries, including retail, consulting, technology, manufacturing, finance, banking, insurance, healthcare, education, telecommunications, and the public sector. The company was founded in 1989 and is headquartered in Tysons Corner, Virginia.

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