MicroStrategy Reports Mixed Signals: Technical Resistance Seen Amid Legal and Earnings Concerns

Technical Analysis

MicroStrategy (MSTR) closed at $369.70 on June 20, 2025, showing modest upward momentum with a 0.18% gain. The stock traded within an intraday range of $365.16 to $376.10 and currently hovers slightly below its 50-day moving average of $371.52, suggesting near-term resistance at that level. The 200-day moving average stands significantly lower at $306.88, marking a longer-term bullish trend in place. The relative strength index (RSI) at 50 signals a neutral momentum, with neither overbought nor oversold conditions. The MACD remains negative (-10.81), indicating lingering bearish momentum over the past three months. Average volume (14.92 million) exceeds current daily volume (12.59 million), reflecting somewhat muted trading interest. Support is identified around $343.03, with resistance near $402.69. The average true range (ATR) of $4.26 suggests moderate volatility. For the next trading day (June 23, 2025), price action is expected to remain within this $343-$402 corridor, with upside capped by the 50-day MA. Over the coming week, unless volume spikes or news catalysts emerge, sideways consolidation is most likely.

Fundamental Analysis

MicroStrategy’s trailing twelve months (TTM) earnings per share (EPS) is deeply negative at -$22.24, with a corresponding negative price-to-earnings (P/E) ratio of -16.62, indicating ongoing losses and lack of profitability. The discounted cash flow (DCF) valuation is notably negative at approximately -$45.87, signaling that current free cash flow forecasts do not support the prevailing price level intrinsically. Market capitalization stands near $101.08 billion, reflecting substantial market interest despite fundamental weaknesses. The company’s sizable bitcoin holdings continue to be a core focus, with recent acquisition of 10,100 BTC for $1.05 billion, raising total holdings to 592,000 BTC. This aggressive bitcoin accumulation strategy exposes the firm to significant crypto market volatility and regulatory risk.

Recent news includes a securities fraud class action lawsuit alleging material misrepresentations impacting investor returns between April 2024 and April 2025, which may exert negative sentiment and pose potential legal liabilities. However, the company’s ongoing commitment to expanding bitcoin assets and targeting a 25% yield in 2025 underscores a high-risk, high-reward investment thesis. The forthcoming earnings announcement on August 7, 2025, may provide clearer direction on operational and financial health.

Consensus analyst sentiment remains generally positive with a consensus "Buy" rating: 16 buy, 7 hold, and 4 sell ratings, with a target price consensus of $220, considerably below the current price, implying potential downside risk.

Intrinsic Value and Long-Term Potential

Intrinsic valuation models reflect negative cash flow and losses, suggesting the current share price ($369.70) exceeds fundamental fair value. The firm’s reliance on bitcoin appreciation for valuation support introduces elevated risk due to crypto market fluctuations and regulatory uncertainties. While bitcoin exposure could yield outsized returns if cryptocurrency prices surge, it also introduces severe downside in adverse conditions. Consequently, the stock’s intrinsic value is depressed relative to market price, limiting its appeal for risk-averse long-term investors.

Despite this, the stock’s 200-day moving average well below the current price indicates some structural price support in a broader uptrend. For long-term investors with high risk tolerance and conviction in bitcoin’s role as a store of value, MicroStrategy offers speculative upside. However, negative earnings and ongoing legal risks necessitate caution and active monitoring.

Next-Day and Weekly Outlook

Short-term technical conditions suggest limited directional momentum with trading expected within a $343 to $402 range. The 50-day MA acts as a near-term resistance barrier, while support near $343 provides a floor. Volume trends do not indicate an imminent breakout. Over the coming week, sideways action or moderate retracement toward support is probable barring material news, particularly given the recent negative legal developments. Elevated volatility driven by bitcoin price fluctuations remains a wildcard.

Overall Evaluation

MicroStrategy presents a complex risk-return profile: significant latent value from bitcoin holdings contrasts with fundamental losses, legal challenges, and a negative intrinsic valuation framework. The current premium valuation versus consensus target and DCF-derived intrinsic value signals potential price correction risk. Technical indicators are neutral, lacking clear bullish trigger.

Classifying MSTR as a Hold candidate captures this nuanced scenario. It is neither a clear sell given its bitcoin asset base nor an outright buy due to fundamental weaknesses and external risks. Investors should weigh aggressive exposure to cryptocurrency-driven equity alongside legal uncertainties and persistently negative earnings dynamics.