Monness, Crespi, Hardt Reiterates Sell Rating on Strategy (MSTR)

Monness, Crespi, Hardt analyst Gus Gala reiterated a Sell rating and $175.00 price target on Strategy (NASDAQ: MSTR).

The analyst commented: "We reiterate our Sell, keep estimates, and keep our price target at $175 (assumes a 5% discount to HODL, consistent with bottom quartile conditions + assumes ~$100k BTC). Strategy is set to report 3Q25 EPS AMC on 10/30 (though unrealized gain on BTC telegraphed earlier this quarter); recall, the valuation of the underlying software business is essentially nil – making operations /results less of a concern (as long as cash burn doesn’t pick up). A point to our thesis
since downgrading has been the low likelihood of MSTR attaining a favorable credit rating; as it happens, S&P still sees the debt as B- (junk rating limits capital efficient issuance in more traditional structures tied to IG status; coincidentally same rating as late 2024 when S&P withdrew its rating at request of the company). This, along with the lowering implied volatility (IV) in underlying BTC (which affects demand from convert arbitrageurs), has in our view meaningfully crimped MSTR’s ability to raise
capital – the dream of IV remaining high (while driving institutionalization) and servicing “export of volatility” legs of the story seem to be in more serious question and we believe market is aware EPS is substantially entirely unrealized losses/gains (which in turn is partially a limiting factor to S&P 500 index inclusion considering level of recurrence for cyclically driven unrealized gains/losses. As we mentioned in the past, BTC px action is helpful but not a necessary condition for our thesis (early April downgrade BTC traded hands at ~$82k vs. $115k today; shares flat over same horizon). The market has come to figure out, in our view, the unsustainable machinations of non-yielding asset gathering strategies."

For an analyst ratings summary and ratings history on Strategy click here. For more ratings news on Strategy click here.

Shares of Strategy closed at $295.63 yesterday.

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