Strategy Remains a Buy at Cantor Even as the Firm Slashes Its Price Target Following the Drop

Cantor Fitzgerald’s Brett Knoblauch has sharply reduced his 12-month price target on Strategy (MSTR), slashing it to $229 from $560 as the company loses access to the rich valuation multiples that once powered its bitcoin-accumulation model. The downgrade reflects a weaker backdrop for capital raising and a sharp drop in Strategy’s adjusted net asset value (mNAV), which now limits the firm’s ability to issue new equity at a premium.

Despite the drastic cut, the new target still implies nearly 30% upside from the current price near $180, and Knoblauch kept an overweight rating on the shares.

Strategy’s entire operating model hinges on raising capital—via common stock, preferred equity, and convertible debt—and using the proceeds to buy more bitcoin. That playbook drove exceptional gains for the company since its first crypto purchase in 2020. But over the past year, investors have been increasingly reluctant to value Strategy at a substantial premium to its bitcoin holdings, and bitcoin’s own subdued price performance has compounded the pressure. Shares are now down roughly 70% from last year’s peak.

Cantor now pegs Strategy’s fully adjusted mNAV at 1.18x, still above parity but far below levels that allowed CEO Michael Saylor to raise billions without meaningful dilution. With the mNAV spread compressed, issuing new common equity could now harm existing shareholders—effectively putting the brakes on Strategy’s fundraising engine.

Knoblauch cut his estimate for Strategy’s annual capital-market inflows to $7.8 billion, down dramatically from a prior $22.5 billion forecast. As a result, the value attributed to the firm’s treasury operations—the potential upside generated from raising money and buying bitcoin—fell from $364 per share to just $74.

Still, the analyst isn’t abandoning the story. “This is a function of both falling bitcoin prices and lower multiples,” Knoblauch wrote, adding that the model could regain traction if bitcoin recovers and investors once again seek leveraged bitcoin exposure.

A separate note from Mizuho struck a more constructive tone regarding Strategy’s near-term financial stability. After completing a $1.44 billion equity raise, the company now holds enough cash to cover 21 months of preferred dividend payments. Analysts Dan Dolev and Alexander Jenkins said this gives Strategy meaningful breathing room, allowing it to avoid selling bitcoin into weakness.

At a recent Mizuho event, CFO Andrew Kang outlined a conservative approach to capital markets activity. He said Strategy does not plan to refinance its convertible debt until its first maturity in 2028, and will instead rely on preferred equity issuance—keeping the bitcoin treasury intact. Kang added that the firm will only resume issuing new common stock when its mNAV rises comfortably above 1, signaling the return of a valuation premium. If that does not materialize, bitcoin sales could be considered as a last resort.

For now, Strategy appears to be following a playbook similar to 2022, when it paused bitcoin purchases during a market downturn and resumed accumulating once conditions improved. Analysts say this patience—and the sizable cash cushion—could help the company navigate its latest challenge while preserving its long-term strategy.

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