Investing.com -- Texas Capital initiated coverage on Strategy Inc with a Buy rating and a $200 price target, citing its position as a leading digital asset treasury manager and growing institutional acceptance of bitcoin.

The Michael Saylor-led company’s equity remains closely tied to Bitcoin price movements, and Texas analysts view its strategy of increasing bitcoin per share as a long-term value driver.

“Due to a favorable regulatory shift with the Trump administration and the broadening of financial market and corporate adoption, we believe Bitcoin has become a more established asset than many investors appreciate,” Texas Capital says.

Texas Capital assumes bitcoin will rise about 10% annually and models $17 billion in capital issuance in 2026. Based on these assumptions and a 1.19x multiple to net asset value, it derives a $200 target price, implying about 42% upside.

The firm said Strategy’s balance sheet is relatively conservative, with debt at roughly 14% of capital and a $2.25 billion cash reserve. That provides about two years of coverage for interest and dividend obligations, which it sees as a buffer in volatile markets.

It also pointed to a fragmented market of more than 30 listed digital asset treasury companies, suggesting Strategy could benefit from a shift toward larger, more liquid platforms if crypto markets weaken. The company’s digital credit instruments offer an average yield of about 11.5%, according to the note.

Texas Capital highlighted policy support as another driver, including recent and proposed U.S. measures aimed at establishing clearer rules for crypto markets and expanding institutional access.

The brokerage acknowledged risks, including reliance on external funding given bitcoin’s lack of yield and concerns around potential technological threats to crypto security. However, it said the company’s liquidity, capital market access and scale help offset those risks.

In its most recent quarter Strategy reported a wider fourth-quarter loss on Thursday, as a turbulent period for digital assets caused the world's largest hoarder of bitcoin to record losses on its holdings.

Strategy logged a loss of $12.4 billion, or $42.93 per share, for the three months ended December 31, compared with a loss of $670.8 million, or $3.03 per share, in the fourth quarter of 2024.

It held 713,502 bitcoins as of February 1, at a total cost of $54.26 billion, or $76,052 per bitcoin.