MSTR Earnings: Microstrategy Plunges Due to Lack of Earnings Per Share, Plans to Raise $42 Billion

Shares of Microstrategy (MSTR) plunged in after-hours trading after the analytics software company, better known for its massive Bitcoin holdings (BTC USD), reported third-quarter fiscal 2024 results and announced its goal to raise $42 billion in capital over the next three years. Earnings per share were -$1.56, below analysts' consensus estimate of -$0.12 per share.

Revenue fell 10.4% year-over-year, reaching $116 million. This also missed analyst expectations of $121.45 million. However, investors are likely to be more interested in the company's Bitcoin.

As of April 26, Microstrategy held 252,220 Bitcoin at an average price of $39,266 per Bitcoin. This represents a total value of $16.007 billion. Additionally, the company’s year-to-date BTC return was 17.8%. The BTC return measures the percentage change in the ratio of Bitcoin holdings to the total assumed diluted stock. This metric allows the company to assess whether its Bitcoin purchasing strategy adds value to shareholders (the higher the return, the better).

MSTR's future plans

Looking ahead, MSTR plans to raise a total of $42 billion over the next three years to purchase more Bitcoin. In the so-called “21/21 plan,” $21 billion is provided in the form of in-the-money equity increases, while the remaining $21 billion comes from debt. This is a huge amount of capital, especially for a company with an enterprise value of $47 billion.

Additionally, the company is targeting a 6% to 10% annual BTC return from 2025 to 2027 as it hopes to raise $42 billion and invest in Bitcoin.

Is MSTR a good stock to buy?

As for Wall Street, analysts have a Strong Buy consensus rating on MSTR stock based on eight purchases made in the past three months, as shown in the chart below. After a 484% increase in the share price over the past year, MSTR's average price target of $220 per share implies a downside risk of 11%. However, it's important to note that estimates are likely to change following today's earnings report.

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