Jefferies Downgrades MicroStrategy to 'Underperform;' Shares Slump
The company holds 129,200 bitcoins, which translates into a $1 billion unrealized loss on its investment due to the fall in the BTC price, a report says.
Business intelligence firm MicroStrategy (MSTR) is faced with a tougher macroeconomic backdrop and has a premium valuation for a low-growth asset, Jefferies said in a research report Tuesday.
The broker downgraded the stock to underperform from hold with an unchanged price target of $180. MSTR shares fell 7% in pre-market trading.
MicroStrategy is a “tale of two cities” – bitcoin and the core business intelligence (BI) business, Jefferies said. The company now holds 129,200 BTC, and the investment is generating losses due to the fall in the bitcoin price.
Bitcoin now makes up 52% of the company's enterprise value (EV) at $2.8 billion, which translates to a $1 billion unrealized loss on a $3.97 billion investment.
The downgrade is due to three main factors, the note said. It will be harder to execute large-scale BI deployments in the near term due to the tougher macro environment, execution surrounding the cloud transition has been “subpar” leading to a decline in billings growth and the stock trades at a premium relative to comparable companies.
For the second quarter, the broker forecasts total revenue growth of 4% (more than the analyst consensus of 3%), non-GAAP operating margins of 13.6%, compared with consensus at 15.5% and a total billings decline of 6% compared with expectations of 6% growth.
MicroStrategy has been a “visionary” on BTC and has established itself as a “thought leader” in the industry, the note said, adding that management has increased leverage on its balance sheet and issued new shares for more bitcoin investment. Management is expected to provide an update on the company’s intent to continue to invest in BTC, the note added.
Read more: Michael Saylor’s MicroStrategy Purchased Another $10M of Bitcoin Over Past Two Months
More For You
What to know:
- As of October 2025, GoPlus has generated $4.7M in total revenue across its product lines. The GoPlus App is the primary revenue driver, contributing $2.5M (approx. 53%), followed by the SafeToken Protocol at $1.7M.
- GoPlus Intelligence's Token Security API averaged 717 million monthly calls year-to-date in 2025 , with a peak of nearly 1 billion calls in February 2025. Total blockchain-level requests, including transaction simulations, averaged an additional 350 million per month.
- Since its January 2025 launch , the $GPS token has registered over $5B in total spot volume and $10B in derivatives volume in 2025. Monthly spot volume peaked in March 2025 at over $1.1B , while derivatives volume peaked the same month at over $4B.
More For You
Bitcoin’s Deep Correction Sets Stage for December Rebound, Says K33 Research
K33 Research says market fear is outweighing fundamentals as bitcoin nears key levels. December could offer an entry point for bold investors.
What to know:
- K33 Research says bitcoin’s steep correction shows signs of bottoming, with December potentially marking a turning point.
- The firm has argued that the market is overreacting to long-term risks while ignoring near-term signals of strength, like low leverage and solid support levels.
- With likely policy shifts ahead and cautious positioning in futures, K33 sees more upside potential than risk of another major collapse.
