Strategy Plunges 59% in 6 Months: Should You Hold or Fold the Stock?

Strategy MSTR, the world’s largest corporate Bitcoin holder, has seen its stock decline 59.3% over the past six months, significantly underperforming both the Zacks Financial – Miscellaneous Services industry’s 15.2% fall and the broader Finance sector’s 8.3% rise.

During the same time frame, MSTR significantly lagged peers, as Hut 8 Corp. HUT and Riot Platforms RIOT have gained 179.5% and 37.2%, respectively, whereas Coinbase Global Inc. COIN fell 41.7%.

MSTR’s sharp decline reflects concerns over its premium valuation and extreme sensitivity to Bitcoin volatility. Unrealized losses of $17.44 billion in Bitcoin holdings in the fourth quarter of 2025, increased risk of index exclusion and declining institutional ownership further pressured the stock.

MSTR Stock Lags Industry, Sector & Peers

Valuation Concerns Mount Around Strategy Stock

MSTR’s lofty valuation remains another concern. The stock is trading at a forward 12-month price-to-sales ratio (P/S) of 100.63X, significantly higher than the industry average of 3.01X. In an adverse market environment, this high valuation could put the stock at risk of further decline. A Value Score of F further underscores overvaluation concerns, especially as peers like Hut 8, Riot Platforms and Coinbase trade at much more modest multiples of 14.95X, 10.06X and 7.91X, respectively.

Price/Sales Ratio (F12M)

Amid a steep pullback in MSTR shares, the company’s long-term growth prospects look promising, prompting investors to reassess how to approach the stock. Let's dig in and analyze.

MSTR Benefits From Digital Credit Instruments Adoption

MSTR continues to benefit from the growing adoption of digital credit instruments, which have become central to its capital-markets strategy. Through preferred securities such as STRF, STRK, STRD and STRC, the company has broadened investor access while funding ongoing Bitcoin accumulation. In 2025, Strategy launched four preferred offerings, reflecting strong demand, rising liquidity and expanding retail participation across major brokerage platforms.

This preferred-led approach has reduced reliance on convertible debt and strengthened balance-sheet flexibility. Year to date, Strategy has raised nearly $20 billion through its capital-markets platform, deploying the proceeds to increase Bitcoin holdings. Management highlighted that its digital treasury model supports tax-efficient, return-of-capital dividends, offers higher yields than traditional credit and enhances long-term Bitcoin accretion.

MSTR’s Steady Bitcoin Accretion Supports Future Upside

MSTR’s scale in Bitcoin ownership has become a long-term strategic advantage. As of mid-January 2025, the company held approximately 687,410 BTC, adding 16,142 BTC in just one month and reinforcing Bitcoin as its primary treasury reserve asset. Control of over 3% of the global Bitcoin supply reflects a move toward continuous, policy-based accumulation rather than opportunistic buying.

This momentum is supported by favorable structural tailwinds. Greater regulatory clarity following IRS guidance on fair-value taxation has reduced uncertainty for long-term Bitcoin holders, while MSTR’s S&P B- credit rating has broadened access to global high-yield capital markets. Meanwhile, expanding institutional adoption through Bitcoin ETFs and derivatives has improved liquidity and softened volatility, supporting a more stable macro framework for continued Bitcoin accumulation and potential upside.

MSTR Shows Stability in Earnings Estimate Revisions

MSTR is showing consistency in analyst forecasts, indicating a steadier earnings outlook.

For first-quarter 2026, the Zacks Consensus Estimate for MSTR’s earnings is pegged at $5.81 per share, unchanged over the past 30 days. This marks a significant turnaround from the prior-year quarter, when the company reported a loss of $16.49 per share, highlighting improving earnings momentum.

The consensus mark for the 2026 earnings is pegged at $51.60 per share, remaining steady over the past 30 days. However, the estimate suggests a year-over-year decrease of 33.88%.

Conclusion: Hold Position Remains Justified

Despite a sharp 59% decline over six months, Strategy’s long-term growth narrative remains intact. Elevated valuation, heavy Bitcoin price sensitivity and recent unrealized losses warrant caution and explain ongoing volatility. However, disciplined Bitcoin accretion, innovative capital-raising through digital credit instruments and stabilizing earnings expectations provide structural support. With structural tailwinds for institutional Bitcoin adoption and a more flexible balance sheet, near-term risks are largely offset by future upside opportunities. Balancing these factors, maintaining a hold position appears justified for long-term-oriented investors.

Strategy currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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