Microstrategy Stock Is UNDERVALUED (MSTR Stock Analysis)

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What’s going on everybody happy Sunday hope you had a nice fun safe weekend welcome back to the channel guys make sure you check out Friday’s video so you can see why I’m bullish on the stock and crypto markets going into the next few weeks but today we’re here to talk about

Micro strategy in particular this is a crypt based stock if you want exposure to Bitcoin in your equities account in your equities portfolio this is one of the main things we can look at besides the Bitcoin ETFs and coinbase and the miners right this is none of the above

Right it’s not an exchange it’s not a minor it’s not an ETF so what exactly is micro strategy what do they do and why do I think the chart is bullish well micro strategy is actually a company that’s been around for decades they are a software company for business right so

B2B Solutions uh focused on software of course you know a lot of AI Solutions here um bi analytics coverage trusted by the world’s most Innovative companies bunch of bigname Partners so um you know they sell their products or Services their AI Solutions their their business software Cloud things like that Data

Solutions for um for different companies right launch immersive AI powered apps that actually drive impact scale and lightting speed hint hint Auto AI so you know they’re definitely all in on the AI stuff at this point in time create apps with ultimate flexibility so they have a

Big platform partnered with um with um all the cloud providers here as well and so that’s what they are right they’re they’re run by Michael sailor and if you know Michael sailor you know he is a Bitcoin maximalist the Bitcoin Maxi mega b right eggplant Emoji to the

Face you might notice up here we have Bitcoin it’s quite interesting you click on bitcoin takes you to this page hope.com Bitcoin is hope this is one of his famous quotes here Bitcoin is a bank in cyberspace run by Incorruptible software offering a global affordable simp and secure savings account to

Billions of people that don’t have the option or desire to run their own hedge fund right so he’s a true you know Bitcoin standard guy if you haven’t heard Michael sailor I recommend watch a couple of these videos read some of these resources um guy’s a beast and he

Really knows his Bitcoin his monetary Theory his all streen economics um right these guys you know you know they’re sharing these these reports here and you know they’re gold standard guys which means they’re Bitcoin standard guys gold standard 2.0 right against uh Fiat uh money of of the 21st century which leads

To all sorts of problems right from society to D advance to to war no savings uh you know corruption things of that nature really recommend you guys read the Bitcoin standard book um but let’s move on here micro strategy trading at $494 $7.7 billion market cap now why do

I think this is pretty interesting doesn’t seem overvalued for a kind of a big Tech stock like Nvidia or or or I don’t know Shopify one of these stocks in big Tech that gets to 100 PE or something like that especially if you combine it with crypto right a risk on

Asset class um kind of a high beta to the NASDAQ asset class well only an 18 forward PE right they have 26 earnings per share they are profitable company7 billion company there is room for growth we’re going to talk about this and of course 22% short interest it is rather

High of course a lot of trafi a lot of Main Street isn’t on the Bitcoin botht volume’s picking up here recently that’s very bullish and let’s scroll down here you guys can pause the screen and read about what they do again they’re software company pretty stable revenues

Not much growth so that’s something you have to consider at this point the software side of the business which is the entire business they’re stable but they’re not growing too much right we’re going to be passing so 500 520 million in revenues um for the next two years um

We can go to earnings over here and we you can see the earnings you know projected to stay positive estimate 26 estimate for next year 2.5 you got to wonder why that’s going to happen we can look into that you guys know I’m not a big fundamental guy um I like to know

The basics but what matters is price action and the chart and I think there’s an interesting valuation thing we’re going to talk about here um of Interest where this thing could be misvalued growth year years they give this a B+ for some reason you know none of a lot

Of this doesn’t make sense total debt 2.24 okay not a lot of cash on hand and that is because micro strategy converted all the cash on their books on their balance sheet into Bitcoin that’s what they did right some companies like Tesla coinbase Marathon you know mining they hold

Bitcoin on the balance sheet but these guys went all out right they converted all their cash into Bitcoin and that’s what they did and that’s why micro strategy the stock is seen as a beta on bitcoin right if you want a high beta play on bitcoin I’m kind of more

Volatile right more returns in bullish times and more draw Downs in the draw down times well this is a stock you want to look into and you can see how much this thing rallies when it really gets going it has a 130% move here in just a

Couple of months those are the kinds of moves micro strategy can do right you can see back here in the previous pool Market this thing went up over 1,300% okay that’s cuz they stack Bitcoin that’s what they do they run their software business with stable revenues it’s not

Growing much if there was if they were a growing software business right if they were like I don’t know like Palante tier like on face like one of these big tech companies you know that’s really growing Uber um you know some of the some of the uh Quantum Computing stuff then this

Thing would be valued you know this thing would be a hundred billion dollar company but they’re stable they’re good you know they’re a leader in the space and what they’ve done is is become this sort of Bitcoin holder forever they never want to sell their Bitcoin

Um it doesn’t do that they took out a bunch of loans when interest rates were low as well very low interest rate environment near zero and they bought Bitcoin on it right because what’s better than debt on an asset that is getting inflated away that getting devalued that asset is a US dollar

There’s nothing better than having debt on an asset that is being devalued especially if that’s very low interest rate debt that’s why the time period from kind of the great financial crisis to 2020 was a great time period to take out some debt and so they bought Bitcoin

On that their average price for the Bitcoin in their books is about 30k so at a bitcoin price of about 42% they’re up about 40% on all their Bitcoin Holdings okay I wanted to see um you know this article points out a lot of

This stuff right here a lot of I want to double check some of these numbers they have 189 150,50 Bitcoins as of last month right this report comes out each month so we’ll see what happens at the end of January and and so at a current bitcoin price their Bitcoin Holdings is sitting

At over $8 billion right and so you got to ask yourself at this point their Bitcoin Holdings alone are worth more than their entire market cap of the company so it seems Mis valued so that’s a that’s an interesting opportunity there because you you you’d be pretty much getting their Bitcoin at a

Discount right then you’re getting the software side of the business or the main business here for free right the main business for free and 500 million a year on Revenue if we want to look at valuation well the you know their 5year average for micro strategy of price to

Sales ratio let’s say let’s call it 7even for the sector medium it’s three let’s take up let’s round that and let’s say five so five times um 500 million that gives you 2.5 billion right and so if you take the 8 billion of their Bitcoin plus 2.5 it’s at least 10.5

Billion in market cap yet they’re only 7.7 so they seem to be discounted at this moment in time again because they are a crypto and you know there’s that kind of stigma against crypto but now with the Bitcoin ETF this is all going to start changing right and so you know

You have at least 40% 50% upside right from 7.7 to 10.5 that’s called at 10.7 you’re going up again you got to go up three billion right which is almost half almost 50% um upside for this move so if we’re looking at it just from a fear valuation perspective you know why can’t

This thing should be trading closer to 700 right um to to these most recent highs and we know that we can go from here to there in just a couple of weeks we know that that’s how this thing can move right so that’s one thing uh that’s

The valuation side of things closer to 700 makes sense right uh at this price right here if you want to take this trade you’re trading you know you’re getting this at a price lower than their Bitcoin right and you’re getting the whole business for free so that’s pretty

Good it’s a profitable business it’s not growing it those growing we’d be paying a much higher premium but it’s a profitable business right it’s in an uptrend it’s making higher highs higher lows higher highs higher lows at this point in time we are here we made a

Fresh higher high and we are retesting this previous structure lows right you can see that right there uh let me just turn that that color that white right so the previous structure highs higher high and now we’re testing a 618 FIB we’re retesting that structure

Low what do we want to see on higher highs we want to see green dots and green tags and a Jupiter pendulum with Rising volume now we have all that okay um we came off kind of heavily as the past two weeks kind of sell the event of

The ATF approval but we’re at the 618 trying to hold right we came into green shade double green Shades um with pendulum Divergence and we have a beautiful shade flip which is when the shade turns off and the Pendulum flips from red to Green that’s a Buy Signal we

Had strong volume on that bar we would have liked it a little bit stronger above average but that’s okay um we like the J with Divergence that we have right here pink dots lower low no pink dots J with Divergence we like that we close back above the moving average and back

Above the 618 so I think it’s a pretty decent entry of course every shade flip goes straight into the Discord as alerts so we got a bunch of these alerts on Friday and um I think it’s a pretty interesting opportunity here for micr cap so both in in kind of valuation side

Of things and in kind of a trading opportunity side of things you know if you’re going to trade with stops below the lows if you want to take stops below the impulse candle whatever you do it you got a position size um however you do on your strategy don’t risk more than

A couple percentage points of your total capital on any one trade um best 1% or under but however you want to do it position size accordingly so from valuation side of things I think there’s a deal to be had here from Trading side of things I think this is an interesting

Setup all right guys let me know what you think thank you so much for watching this on a Sunday I really hope we earn your thumbs up here really appreciate a subscribe to the channel if you enjoy this kind of content and I’ll see you guys in the next one much love peace