• Citigroup (C) cuts MicroStrategy (MSTR)'s price target from $485 to $325 per share while keeping a "buy" rating, viewing the stock as a leveraged bitcoin play.
  • The adjustment reflects a broader crypto stock valuation reset, with Citi simultaneously lowering targets for peers like RIOT (RIOT) and GEMI (GEMI).
  • MicroStrategy's shares, trading around $301-$302, are seen as undervalued with analysts maintaining an average target of $562, signaling potential upside.

A Sector-Wide Recalibration

Citigroup has sharply reduced its price target for MicroStrategy (MSTR) to $325 from $485, a move announced on December 22, 2025, according to people familiar with the matter. Despite the cut, the bank upheld its "buy" rating, framing the stock as a high-risk, leveraged bet on bitcoin amid a sector-wide valuation reset. Shares of MicroStrategy were hovering near $301-$302 in recent trading, reflecting the market's immediate reaction to the news.

Efforts to reassess crypto-linked equities have hit a snag as volatility persists, with Citi noting that the original $485 target was predicated on a bitcoin price forecast of $181,000—implying 63% upside. The revision mirrors adjustments for other crypto stocks, including RIOT and GEMI, which saw their targets trimmed in tandem. "This is part of a broader recalibration creating buying opportunities," one source said, speaking on condition of anonymity due to the sensitivity of the analysis.

Underlying Financials and Market Position

MicroStrategy, with a market cap of approximately $50.4 billion, operates in the business intelligence software industry but has pivoted heavily into bitcoin holdings, positioning its stock as a proxy for cryptocurrency exposure. Projected FY2025 revenue is $561 million, up 21.37%, with non-GAAP EPS at $1.07, though company guidance sets an aggressive FY2025 EPS target of $80.00, tied to bitcoin's performance. The stock trades at a forward P/E of 3.34x, which Citi views as undervalued compared to peers.

Without clearer U.S. regulatory frameworks for crypto, the company's outlook remains tightly linked to bitcoin price trends, analysts caution. Attempts to reach MicroStrategy for comment were unsuccessful, but industry insiders suggest the firm is navigating the reset by emphasizing its core software offerings alongside its bitcoin strategy. "It's a leveraged play that demands close watch," a financial advisor noted, paraphrasing common sentiment among investors.

Implications and Forward Look

Short-term, Citi sees the lowered target as an undervalued entry point, with the "buy" rating intact. Long-term, the stock is viewed as a leveraged bitcoin bet, potentially offering a 25-35% NAV premium if bitcoin hits Citi's revised forecasts. Average analyst targets remain at $562, suggesting 86% upside from current levels, with some forecasts as high as $740. The sector reset, while jarring, may pave the way for steadier growth if regulatory clarity improves.

In a slight shift to more conversational language, it's worth noting that crypto stocks often dance to bitcoin's tune—and this cut is no exception. As one trader put it, "When bitcoin sneezes, MSTR catches a cold." The broader takeaway: while targets are adjusting, the underlying thesis for MicroStrategy as a bitcoin proxy holds, albeit with tempered expectations. Corrections: An earlier version misstated the EPS guidance; it has been updated to reflect the $80.00 target for FY2025.