‘Load Up,' Says BTIG About Strategy Stock

Business Insider

20-05-2025

Strategy (NASDAQ:MSTR) held its annual Strategy World conference in Orlando earlier this month, attracting Bitcoin thought leaders, institutional investors, corporations exploring Bitcoin treasury adoption, and users of its enterprise software. Unlike in previous years, the 2025 event shifted focus away from purely educational sessions on Bitcoin, placing greater emphasis on Strategy's evolving role within the Bitcoin ecosystem and the investment vehicles it now offers.
Confident Investing Starts Here:
Easily unpack a company's performance with TipRanks' new KPI Data for smart investment decisions
Receive undervalued, market resilient stocks straight to you inbox with TipRanks' Smart Value Newsletter
Attending the event, BTIG analyst Andrew Harte concluded that the company's plans for both MSTR stock and Bitcoin are as 'ambitious and passionate as they have ever been.'
For those wondering what the end game of all the BTC buying is, the explanation is rather obvious; Harte notes that during the conference, management repeatedly emphasized that their top priority is maximizing the value of MSTR stock. The key lies in strategically and opportunistically managing the company's bitcoin treasury operations. Each of Strategy's investment vehicles contributes to value creation for MSTR shareholders, offering varying levels of risk.
Strategy offers three main types of investment securities: common stock (MSTR), preferred stock (STRF and STRK), and convertible debt. The preferred shares and convertible debt, which are forms of fixed-income securities, serve as a way to amplify exposure to Bitcoin. They essentially act as leverage, increasing the amount of Bitcoin per MSTR share and introducing more volatility into the stock.
That volatility, according to Harte, isn't accidental – it's strategic. 'To be clear,' he emphasized, 'the goal of the leverage is to add volatility to MSTR stock and enable it to outperform the price of bitcoin over time.'
Harte thinks that from MSTR's perspective, STRF (along with STRK) appears to be the most effective tool for boosting that upside. STRF stands out because, unlike other investment vehicles, it doesn't convert into common MSTR shares. This makes it the most sensitive to movements in Bitcoin, reflected in its highest Bitcoin Multiple and Bitcoin Torque, key metrics that measure how strongly STRF responds to changes in Bitcoin's price.
Importantly, STRF's performance isn't directly tied to MSTR's market Net Asset Value (mNAV), a metric that affects other securities. This means STRF and STRK can be used more aggressively to try to increase MSTR's overall asset value over time, which management says is their second priority (after boosting the MSTR share price).
That said, STRF also comes with the highest risk: it has the steepest Bitcoin Hurdle Rate and the highest Breakeven Price, meaning Bitcoin has to rise more significantly for STRF to generate returns. So while the upside is potentially the greatest, it also requires the most from the market, and carries the most downside if things don't go as planned.
For investors willing to stomach that kind of volatility, Harte sees solid upside. He rates MSTR shares a Buy, with a price target of $620, implying a potential gain of 55% from current levels. (To watch Harte's track record, click here)
MSTR gets plenty of additional support from Harte's colleagues. Based on a mix of 12 Buys and 1 Sell, the stock carries a Strong Buy consensus rating. Going by the $524.92 average price target, investors could be pocketing returns of ~27% a year from now. (See MSTR stock forecast)
To find good ideas for stocks trading at attractive valuations, visit TipRanks' Best Stocks to Buy, a tool that unites all of TipRanks' equity insights.