Strategy initiated with a Buy rating at H.C. Wainwright

Investing.com -- H.C. Wainwright has initiated coverage of Strategy (formerly Microstrategy (NASDAQ:MSTR)) with a Buy rating and a $480 price target, calling it "one of the most compelling public equity investments available to investors seeking to gain levered upside exposure to BTC."

In a new research note, the firm described Strategy as a “turbocharger on the best-performing global asset of the past decade,” emphasizing its unique position in the market due to its large Bitcoin holdings and aggressive capital-raising strategy. 

According to analysts, Strategy has raised more than $25 billion in equity and debt over the past two quarters to accumulate 538,200 BTC, currently valued at $49 billion.

H.C. Wainwright believes the company’s ability to acquire Bitcoin faster than it issues shares justifies “a durable and healthy premium to NAV.” 

The firm adds that institutional investors are “significantly underestimating BTC’s upside potential in 2025 and by extension Strategy’s capacity to raise additional capital to fund incremental BTC purchases.”

While analysts acknowledge the potential for a short-term Bitcoin correction in the second quarter due to macro headwinds, they remain bullish for 2025. 

“We still believe BTC could rally to $225,000 per coin later this year,” the analysts wrote, though that target is not baked into their model. Their NAV-based price target assumes BTC reaches $150,000 and Strategy grows its holdings to roughly 600,000 BTC by year-end.

The firm noted that “Strategy’s ‘first mover’ advantage” and commitment to not selling any Bitcoin have earned credibility among retail investors. 

Additionally, recent price action suggests BTC is beginning to “decouple from equities,” while Strategy has “continued to outperform BTC,” says H.C. Wainwright.

The firm warns of risks including Bitcoin price volatility, execution challenges in raising capital, and dilution from equity sales, but concludes that Strategy is poised to outperform.