thebtcpharaoh on Nostr: Some thoughts on valuation post $MSTR earnings call.. as usual, make of it what you ...
Some thoughts on valuation post $MSTR earnings call.. as usual, make of it what you will.
1) consider the following: a company with $46B in cash, and an operating business that is generating a sustainable $10B in FCF/earnings. Let's apply a 15x multiple to the earnings, and we get to a close to $200B valuation (approx. $790/share)
2) the $10B 2025 earnings guidance is likely very conservative, since they achieved $13B in 2024 when they were a much smaller company. In other words, it took 74% BTC yield to achieve $13B in earnings given the base effect. Even if they only achieve half that yield (say 35%) in 2025, that would already put their earnings at closer to $15B. Now apply a 15x multiple on that, and you get to a share price of $1050.
3) now add to the above that their treasury is actually in Bitcoin, which is growing in value by 50-60% p.a., (granted will decline in growth rate over time) and any earnings they achieve will be added to the treasury and continue to compound from there.
4) and of course this does not factor in and 'yield' on their treasury just yet..
5) so the above is to say, if at a share price of $335 the mNAV is 2x, at a $1050 share price a more appropriate mNAV would be 6x. And of course, if we get anywhere close to there, MSTR would only further accelerate the ATM and go even faster.
That's your base case. The bull case is we 2-3x that.
#Bitcoin #MSTR #SMLR
1) consider the following: a company with $46B in cash, and an operating business that is generating a sustainable $10B in FCF/earnings. Let's apply a 15x multiple to the earnings, and we get to a close to $200B valuation (approx. $790/share)
2) the $10B 2025 earnings guidance is likely very conservative, since they achieved $13B in 2024 when they were a much smaller company. In other words, it took 74% BTC yield to achieve $13B in earnings given the base effect. Even if they only achieve half that yield (say 35%) in 2025, that would already put their earnings at closer to $15B. Now apply a 15x multiple on that, and you get to a share price of $1050.
3) now add to the above that their treasury is actually in Bitcoin, which is growing in value by 50-60% p.a., (granted will decline in growth rate over time) and any earnings they achieve will be added to the treasury and continue to compound from there.
4) and of course this does not factor in and 'yield' on their treasury just yet..
5) so the above is to say, if at a share price of $335 the mNAV is 2x, at a $1050 share price a more appropriate mNAV would be 6x. And of course, if we get anywhere close to there, MSTR would only further accelerate the ATM and go even faster.
That's your base case. The bull case is we 2-3x that.
#Bitcoin #MSTR #SMLR