Three analysts downgraded their forecasts on Strategy after the report. What spooked them?

At least three analysts - from Cantor Fitzgerald, TD Cowen and BTIG - lowered their target prices on shares of Strategy, the largest corporate bitcoin holder, following the release of its third-quarter report. As a result, the average target on the company's securities fell to the lowest level since Ma. Experts have expressed concern about what will happen to the company's stock price for the rest of the year, as the premium the company receives over the value of its bitcoin assets continues to shrink. However, in the long term, all three look at Strategy's securities positively.

Cantor Fitzgerald analyst Brett Knoblauch lowered his target price on Strategy stock from $697 to $560, while maintaining an Overweight rating (above market), Investing.com reports. Knoblauch's new target is 120% above the previous trading's closing price. He emphasized that Strategy owns 3.1% of all bitcoins in circulation, allowing the company to benefit from the cryptocurrency's growing share of global wealth. However, the investment bank expressed concern that the decline in adjusted net asset value (mNAV) reduces Strategy's capital-raising potential and leads to a lower overall business valuation. According to Cantor Fitzgerald, the company is moving toward a bitcoin yield of around 30% in 2025 after a record 74.3% in 2024. Knoblauch also noted that to meet Strategy's forecast of $20 billion in operating profit for the fourth quarter, bitcoin would have to rise to $150,000 by the end of the year, Bloomberg adds. Bitcoin is now just above $110k, and it has never previously surpassed the $127k mark.

TD Cowen analyst Lance Vitanza worsened his target on Strategy's securities from $620 to $535, but also maintained his Buy advice. According to the analyst, after three strong quarters, the fourth has started off sluggishly, with bitcoin price growth slowing and the bitcoin premium shrinking sharply, leading to a slowdown in new capital raising and a drop in bitcoin yields - now measured in fractions of a percent, whereas before it was measured in full percentages. However, TD Cowen expects the bitcoin premium and capital raising volumes to resume growth in 2026, as they have in past cycles. The analyst also noted that the recent S&P credit rating effectively tripled the company's potential market, and going international could double that figure again.

Investment bank BTIG lowered its target price on Strategy shares from $700 to $630, but also left Buy advice, Investing.com reports. BTIG's new target is nearly 150% above the stock's closing price in recent trading. The analyst noted that the company is building a "credit factory" that offers investors different levels of bitcoin investments and shapes the "bitcoin yield curve." BTIG also noted that the company intends to expand its potential market by offering loan products to new categories of investors, including international securities. The investment bank expert added that Strategy's securities are now trading at an attractive valuation of about 1.3 times adjusted net asset value versus an average of 2.1 over the past year.

As a result of target price downgrades, Wall Street's average target for Strategy's securities has fallen to its lowest level since Ma, Bloomberg emphasizes. The vast majority of analysts - 16 out of 18 - advise investors to buy the company's securities (Buy and Overweight), MarketWatch shows.

In trading on October 31, Strategy shares soared 8.5% to $276.3, but then lost half of the growth. However, quotations still remain more than 40% below the record high reached in November 2024. Compared to the beginning of 2025, the market value of the company has slipped by 7%.

Strategy exceeded Wall Street's net income forecast by $2.8 billion in the third quarter, Bloomberg notes. The company's "unrecognized" profit reached $3.9 billion thanks to the growth in the value of bitcoin. However, Strategy did not sell the assets itself, which means that the real profit has not yet been recorded.

Strategy was originally an enterprise software developer until CEO Michael Saylor converted the company's capital into bitcoin in 2020. Since then, Strategy's stock has become dependent not on earnings, but on the value of assets in bitcoins - a measure of market-adjusted net asset value (mNAV). In some periods, the stock traded at more than double that level, but now mNAV has fallen to about 1.3, Bloomberg emphasized.

This article was AI-translated and verified by a human editor