MSTR falls 41%, is it still worth holding? In-depth analysis of MicroStrategy's Bitcoin strategy

The contradiction between stock price big dump and long-term potential

MicroStrategy (MSTR) has fallen by 41.1% this year, far exceeding the industry average performance. Compared to other Bitcoin-related companies such as Riot Platforms (up 24.5%) and CleanSpark (up 5.7%), MSTR's decline is particularly striking - even Coinbase has only fallen by 3.1%. Where does the problem lie?

Overvaluation is the main issue

This is not a technical issue, it's a price issue. MSTR's forward price-to-sales ratio is as high as 99.25 times, while the industry average is only 2.92 times. In comparison, Riot's is 6.4 times and Coinbase's is 7.91 times, the gap is obvious. In other words, investors are paying an outrageous price for every dollar of revenue from MSTR.

But MSTR has two cards that could turn the tide

First Card: Huge Bitcoin Reserves MSTR holds 640,000 BTC, with a total value of approximately 71 billion USD, making it the largest enterprise-grade Bitcoin vault in the world. So far this year, the appreciation of Bitcoin alone has brought the company a paper profit of 12.9 billion USD. In the words of the management, the BTC yield reached 26%, with an annual target of 30%—this deal is extremely cost-effective.

Strong financing capability MSTR raised $5.1 billion in Q3 through multiple ATM financing channels (including the recently IPO'd STRC stock), and additionally raised $89.5 million in October. This means that as long as Bitcoin exists, MSTR has a continuous source of financing ammunition to keep buying the dip.

Second Slide: Hidden Value of Software Business MSTR's software business (analytics solutions) has been overshadowed by the Bitcoin story, but the data is impressive: Q3 software revenue grew by 10.9% year-on-year, and subscription services surged by 65.4%. This segment is a stable, high-margin cash flow that can help balance the risks of Bitcoin volatility.

Reversal Imminent? Profit Expectations Change Drastically in 2025

MSTR is expected to have an earnings per share of $80 in 2025, while the consensus expectation is $78.04. Compared to a loss of $6.72 per share in 2024, this is a 180-degree turnaround. Once Bitcoin continues to rise, this expectation will further exceed expectations.

Conclusion: Should I buy now or wait?

Short-term view: Valuation is still high, the cryptocurrency market is highly volatile, and there needs to be a mental preparation for holding positions.

Medium-term outlook: Bitcoin reserves continue to grow + software business steadily increases + profit rebounds, the narrative framework is in place.

Current Optimal Strategy: Hold. Not the best entry point, but if you are optimistic about Bitcoin's long-term prospects, MSTR is another way to gain indirect exposure—amplifying BTC returns using the leverage effect of a publicly traded company. Both risks and opportunities are magnified.