Is Strategy Stock (MSTR) a Buy Ahead of Earnings Thursday?

TLDR

• Strategy reports Q4 2025 earnings on February 5, with expectations for a narrower loss of $0.08 per share versus $3.03 last year
• The company holds 712,647 bitcoin worth approximately $60 billion, accounting for 3.4% of Bitcoin’s total supply
• MSTR stock trades at $143 with a market cap of $46 billion, representing a 0.7x discount to its Bitcoin holdings’ net asset value
• Wall Street maintains a Strong Buy rating with an average price target of $439.36, implying 206% upside potential
• MSCI decided against excluding digital asset treasury companies from indexes in January 2026, providing temporary relief

Strategy reports fourth quarter 2025 earnings after market close on February 5. The company has transformed from a software business into a Bitcoin treasury vehicle, now holding over 712,000 bitcoins.

Shares dropped 10% on January 29 to $143. That pushed the six-month decline to 64%. The stock is down 55% over the past year.

Strategy Inc, MSTR

Bitcoin’s price moves drive MSTR’s valuation. The cryptocurrency trades around $82,000, down from its October peak above $126,000. Strategy’s market cap sits near $46 billion, below the $60 billion value of its Bitcoin holdings.

This creates an unusual situation. Investors can buy MSTR at a 0.7x price-to-net-asset-value ratio. The stock historically traded at 2-3x premiums to NAV.

The premium disappeared after Bitcoin spot ETFs launched in 2024. These ETFs offer direct exposure without the complexity of Strategy’s structure.

Wall Street expects the company to post a loss of $0.08 per share for Q4. That compares to a $3.03 loss last year. Revenue is projected at $119.12 million, down 1.3% year-over-year.

Strategy missed earnings estimates in six of the past nine quarters. The track record isn’t great.

The Bitcoin Accumulation Strategy

CEO Michael Saylor raised nearly $50 billion through equity and debt over five years. The capital funded Bitcoin purchases regardless of price. In January 2026, the company bought 2,932 bitcoins for $264 million at an average price of $90,061 per coin.

As of January 25, total holdings reached 712,647 bitcoins. The average cost basis is approximately $54.2 billion.

Saylor calls this approach “Bitcoin yield.” The goal is increasing Bitcoin per share over time. But it comes with dilution risks every time new capital is raised.

The legacy software business generates minimal revenue. Q4 2025 software revenue hit $128.69 million, beating estimates of $116.65 million. But this isn’t why investors buy the stock.

Strategy faces $689 million in annual obligations for dividends and interest. Management set aside a $2.19 billion cash reserve in December 2025. That covers payments for roughly 21 months.

The company doesn’t generate enough operating cash flow to service debt. It needs to either issue more equity, raise debt, or sell Bitcoin. Saylor opposes selling Bitcoin.

Analyst Views and Index Concerns

Cantor Fitzgerald analyst Ramsey El-Assal initiated coverage with an Overweight rating and $213 price target. He cited the company’s effective capital-raising approach for Bitcoin exposure. He expects rising institutional adoption to support the strategy.

Mizuho analyst Dan Dolev lowered his price target to $403 from $484. He maintained an Outperform rating. The cut reflects near-term uncertainty in crypto markets.

Thirteen Wall Street analysts give MSTR a Strong Buy consensus. Eleven rate it Buy, two say Hold. The average price target of $439.36 implies 206% upside from current levels.

MSCI created concerns in late 2025. The index provider suggested excluding firms with over 50% of balance sheets in digital assets. JPMorgan estimated potential outflows of $8.8 billion if Strategy got kicked out.

On January 6, 2026, MSCI decided against the exclusion. The stock jumped 2.5% on the news. But MSCI stated it won’t increase Strategy’s index weighting or allow size-segment migrations. A more extensive review is coming.

Strategy declared a $17.44 billion unrealized loss in Q4 2025. Bitcoin dropped 25% that quarter. Under accounting standards adopted in Q1 2025, the company marks Bitcoin holdings to fair market value quarterly.

This creates massive earnings volatility. The stock fell 53% in Q4 alone.

Q4 adjusted EPS came in at $8.42 per share, crushing the -$0.10 estimate. But the beat stemmed entirely from Bitcoin mark-to-market accounting adjustments, not software profitability.

The investment case is binary. Bulls see leveraged Bitcoin exposure at a discount. Bears see debt risk, dilution, and model sustainability questions. During the 2022 crypto winter, MSTR plunged 89.3% from peak to trough.

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