According to ChainCatcher, Benchmark analyst Mark Palmer gave MicroStrategy a "buy" rating, predicting that the price of Bitcoin will reach $225,000 by the end of 2026 and proposing a target price of $650.
Analysts are willing to assign a price-to-earnings multiple to the theoretical gains MicroStrategy could create by issuing shares or bonds to buy bitcoin. Bitcoin has "earned" more than 70% this year, but relies on selling shares at a high premium.
MicroStrategy's high premium in 2024 is a special case. In 2022 and 2023, the company's stock price is almost in line with the value of its Bitcoin holdings, and the premium is about 20% at the end of 2023. If the premium decreases and the price of Bitcoin falls, the stock price may face downside risks.
