Strategy MSTR shares have dropped 13.1% in the past month, underperforming the Zacks Financial- Miscellaneous Services industry’s and the broader Zacks Finance sector’s fall of 3.7% and 1.4%, respectively. The fall can be attributed to volatility inbitcoin pricesthat have suffered from a challenging macroeconomic environment and uncertainty over the U.S. government shutdown.
Strategy is the world’s largest bitcoin treasury company, holding 640,250 bitcoins as of Oct. 12. MARA Holdings MARA, Riot Platforms RIOT and CleanSpark CLSK are other well-known companies that hold bitcoins in their respective balance sheets. As of Sept. 30, MARA Holdings, Riot Platforms and CleanSpark had 52,850, 19,287 and 13,011 bitcoins, respectively.
Strategy shares have underperformed Riot Platforms, MARA Holdings and CleanSpark over the past month, shares of which have jumped 8.6%, 5.6% and 16.7%, respectively.
MSTR Stock’s One-Month Performance
Image Source: Zacks Investment Research
Given the massive drop in MSTR’s share price, how should investors approach the stock right now? Let’s find out.
Strategy Shares are Overvalued
Strategy shares are currently overvalued, as suggested by the Value Score of F.
In terms of price/book, Strategy is trading at 1.68X compared with MARA Holdings’ 1.48X, suggesting a premium valuation.
MSTR vs. MARA Valuation
Image Source: Zacks Investment Research
MSTR stock is currently trading below the 50-day and 200-day moving averages, indicating a bearish trend.
MSTR Stock Trades Below 50-Day and 200-Day SMAs
Image Source: Zacks Investment Research
Can Growing Bitcoin Holding Aid MSTR’s Prospects?
Strategy benefits from the Trump administration’s announcement of the establishment of a strategic bitcoin reserve. Bitcoin, the most popular cryptocurrency, has been benefiting from increasing acceptance as a non-sovereign asset, as well as higher institutional and corporate adoption.
The company’s disciplined approach to capital raising through preferred equity offerings — Strike (STRK), Strife (STRF), STRD (Stride) and STRC (Stretch) — is a key catalyst. STRK offers an 8% dividend coupon plus MSTR exposure through conversion rights, and has an effective yield of 7.5% as of July 29. STRF offers a 10% cash dividend coupon with enhanced payment protection features and has had an effective yield of 8.7% as of July 29. STRD offers a 10% cash dividend coupon with strong collateral coverage and has an effective yield of 11.9%. STRC offers a variable monthly cash dividend with an effective yield of 9.5% as of July 30. As of Oct. 12, STRK, STRF, STRD and STRC had $20.37 billion, $1.699 billion, $4.15 billion and $4.2 billion, respectively, available for issuance and sale.
Strategy currently expects to achieve a bitcoin yield of 30% and $20 billion in gains, assuming thebitcoin pricehits $150,000 at the end of the year. For 2025, Strategy expects operating income of $34 billion, net income of $24 billion and earnings of $80 per share, based on abitcoin priceoutlook of $150,000 at the end of the year.
However, the recent volatility inbitcoin pricesmakes this target difficult to achieve. Bitcoin is trading close to 110,000 today, much lower than $125,338.99, the cryptocurrency hit in early October.
Bitcoin Price Chart
Image Source: Zacks Investment Research
Earnings Estimates Revision Trend Steady for MSTR
For third-quarter 2025, the Zacks Consensus Estimate for MSTR’s loss has been unchanged at 11 cents per share over the past 30 days. The company reported a loss of $1.56 in the year-ago quarter. The consensus mark for revenues is pegged at $118.2 million, indicating 1.84% year-over-year growth.
For fourth-quarter 2025, the consensus mark for MSTR’s loss has been unchanged at 8 cents per share over the past 30 days. The company reported a loss of $3.20 in the year-ago quarter. The consensus mark for fourth-quarter 2025 revenues is pegged at $123.3 million, indicating 2.2% year-over-year growth.
Consensus Estimate Trend
Image Source: Zacks Investment Research
For 2025, the Zacks Consensus Estimate for MSTR’s loss has been unchanged at $15.73 per share over the past 30 days. The company reported a loss of $6.72 per share in 2024. The consensus mark for 2025 revenues is pegged at $466.8 million, indicating 0.7% growth over 2024’s reported figure.
Conclusion
Despite growing bitcoin holdings, Strategy suffers from a stretched valuation, challenging macroeconomic conditions and uncertainty about the U.S. government shutdown that increases volatility in bitcoin trading. Modest top-line growth and increasing 2025 losses make the stock risky for investors.
Strategy currently has a Zacks Rank #3 (Hold), which implies that investors should wait for a more favorable entry point to start accumulating the stock. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Radical New Technology Could Hand Investors Huge Gains
Quantum Computing is the next technological revolution, and it could be even more advanced than AI.
While some believed the technology was years away, it is already present and moving fast. Large hyperscalers, such as Microsoft, Google, Amazon, Oracle, and even Meta and Tesla, are scrambling to integrate quantum computing into their infrastructure.
Senior Stock Strategist Kevin Cook reveals 7 carefully selected stocks poised to dominate the quantum computing landscape in his report, Beyond AI: The Quantum Leap in Computing Power.
Kevin was among the early experts who recognized NVIDIA's enormous potential back in 2016. Now, he has keyed in on what could be "the next big thing" in quantum computing supremacy. Today, you have a rare chance to position your portfolio at the forefront of this opportunity.
See Top Quantum Stocks Now >>Strategy Inc (MSTR) : Free Stock Analysis Report
Marathon Digital Holdings, Inc. (MARA) : Free Stock Analysis Report
Riot Platforms, Inc. (RIOT) : Free Stock Analysis Report
Cleanspark, Inc. (CLSK) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
