Can Strategy's stock price rebound after a decline? Investment banks' growth calculations reveal a 150% upside potential

Last year in the second half, the stock price of Bitcoin whale Strategy (MicroStrategy, stock code MSTR) experienced a sharp decline, dropping as much as 66%, disappointing many investors tracking the company. However, after this adjustment, the latest assessment from investment bank analysts reveals a different story — despite the pressure on the stock price, there remains considerable room for a rebound from a valuation perspective.

TD Cowen analyst Lance Vitanza recently conducted a valuation reassessment of Strategy, lowering the 12-month target price from $500 to $440. At first glance, this appears to be a negative adjustment, but based on the current stock price, it still implies a potential upside of 150%. This calculation of growth has restored confidence among many investors.

The Calculations Behind Aggressive Bitcoin Accumulation

Surprisingly, Strategy did not slow down amid the stock price pressure; instead, it accelerated its Bitcoin acquisition pace. Led by Michael Saylor, the company continues to actively raise funds, expecting to hold an additional 155,000 Bitcoins this year, far exceeding the previous estimate of 90,000. This “counter-cyclical” strategy reflects the management’s firm belief in Bitcoin’s long-term prospects.

However, this aggressive expansion also comes with costs. Recently, Strategy issued common shares at a relatively low premium (with limited premium over net asset value, NAV), which directly diluted the company’s core performance metric — the “Bitcoin Yield (BTC Yield).”

The Truth Behind the Yield Downgrade

In its latest assessment, Lance Vitanza lowered Strategy’s Bitcoin yield for this year from 8.8% to 7.1%. Compared to last year’s impressive 22.8%, the decline is significant. Nevertheless, the analyst forecasts Strategy’s Bitcoin dollar gains (BTC $ Gain) will reach $9.4 billion this year, still higher than the previous estimate of $6.3 billion, indicating that despite the downward revision of the yield, the overall revenue scale continues to expand.

Behind this complex calculation lies a balancing issue: rapidly increasing Bitcoin holdings can indeed boost absolute gains, but since the marginal yield of new investments is relatively low, the overall yield metric is diluted.

Strategy Remains an Effective Tool for Bitcoin Investment

Despite the valuation adjustment, Lance Vitanza still regards Strategy as “an effective proxy for participating in Bitcoin market movements,” especially suitable for investors optimistic about Bitcoin’s long-term outlook but inclined to participate through the US stock market.

The analyst’s outlook on Bitcoin itself remains unchanged. He estimates Bitcoin could reach $177,000 by the end of the year and climb further to $226,000 by 2027. Within this price appreciation framework, the 150% upside potential of Strategy becomes even more convincing — because its growth potential largely depends on Bitcoin’s long-term trend.

For investors who can tolerate volatility and believe in Bitcoin’s trend, now may be the right time to reassess this company’s investment opportunity.