To The Moon

$Strategy(MSTR)$ is set to report its Q2 2025 earnings on July 31, 2025. As the company has become highly correlated with the price of Bitcoin due to its significant BTC holdings, its earnings report will be closely scrutinized by investors and traders alike.

EPS: The consensus EPS forecast is a loss of around $0.12 per share, which is a significant improvement from the loss of $0.76 per share in the same quarter last year.

Revenue: The consensus revenue estimate is approximately $112.15 million, a slight increase from the previous year.

Based on its Q1 2025 earnings report, Strategy (MSTR) delivered a mixed performance. The company reported a significant net loss of $4.22 billion, or $16.49 per diluted share, which was a substantial miss on analyst expectations.

This loss was primarily driven by a new accounting standard (ASU 2023-08) which required MSTR to recognize an unrealized fair value loss of $5.9 billion on its digital assets due to Bitcoin's price fluctuations during the quarter. On the other hand, the core software business showed strong underlying growth, with subscription services revenue surging 61.6% year-over-year.

The key lesson from MSTR's guidance is a reinforcement of its aggressive and highly leveraged Bitcoin strategy. Management increased its 2025 Bitcoin yield target to 25% and its Bitcoin dollar gain target to $15 billion.

This was supported by a new $21 billion at-the-market (ATM) common stock offering and a "42-42 capital plan" to raise a total of $42 billion by 2027. The company's guidance clearly signals that its primary focus is on expanding its Bitcoin treasury, and its financials will be more volatile than ever due to fair value accounting.

This means the company's performance is almost entirely tied to the price of Bitcoin, overshadowing the traditional business metrics.

Key Metrics to Watch For Strategy (MSTR) Fiscal Q2 2025 Earnings

When analyzing Strategy's Q2 2025 earnings, investors should pay close attention to both its traditional business performance and its digital asset strategy.

1. Bitcoin Holdings and Fair Value Accounting:

Total Bitcoin Holdings: The most critical metric for MSTR is the total amount of Bitcoin it holds. As of July 20, 2025, the company held 607,770 BTC. Any updates on this number, including new acquisitions during the quarter, will be a major focus.

Fair Value Accounting: MSTR has adopted fair value accounting for its digital assets, meaning its reported earnings will reflect unrealized gains or losses on its Bitcoin holdings. A significant increase or decrease in the price of Bitcoin during the quarter will directly impact the company's reported profit or loss. Analysts are forecasting a record in unrealized profits for Q2 2025, primarily driven by a 30% increase in Bitcoin's price.

2. Core Business Performance:

While Bitcoin is the primary driver of MSTR's stock price, its underlying software business still provides an important foundation.

Revenue: Analysts are expecting a modest increase in revenue, with a consensus estimate of around $112.15 million, representing a slight year-over-year growth. The software business, particularly subscription services, has shown strong growth, and this trend is expected to continue.

Subscription Revenue Growth: In Q1 2025, subscription services revenues surged 62% year-over-year. Investors will be looking for continued strength in this area as it indicates the health of the core business.

Operating Expenses and Net Loss: The company's reported net loss will be heavily influenced by the fair value changes of its Bitcoin holdings. However, investors should also analyze the operating expenses of the core software business to understand its profitability separate from the digital asset strategy.

Strategy (MSTR) Price Target

Based on 13 analysts from Tiger Brokers offering 12 month price targets for Strategy in the last 3 months. The average price target is $495.38 with a high forecast of $680.00 and a low forecast of $200.00. The average price target represents a 25.52% change from the last price of $394.66.

Analyst Expectations

Zacks Rank: The stock currently holds a Zacks Rank #3 (Hold), suggesting that while there's no immediate reason to sell, investors might want to wait for a better entry point.

Technical Analysis - Exponential Moving Average (EMA)

We can see that MSTR is declining as Bitcoin trend downwards below $118K, and now it is trading below the 50-day period, though it has a positive momentum, but that might not be enough for MSTR to make a break out.

So what investors need to watch is MSTR traditional business earnings and also its digital asset strategy on how MSTR decide to monetize from it, so I am expecting some volatility trading today before its earnings on 31 July 2025.

Short-Term Trading Opportunities

Strategy's stock is known for its high volatility and its strong correlation with the price of Bitcoin. This makes it a potential vehicle for short-term trading, especially around earnings announcements.

High Volatility: The stock's price can move dramatically after an earnings report, making it attractive for options trading or quick entries and exits. The implied straddle for the upcoming earnings is around 6.9%, which indicates a significant price swing is expected.

Bitcoin Price as a Catalyst: The most significant factor influencing MSTR's post-earnings movement will likely be the price of Bitcoin. A positive surprise in Bitcoin holdings, or a strong and positive outlook on the crypto market from management, could lead to a rally. Conversely, any negative news or a downturn in the crypto market could trigger a sharp sell-off.

Core Business vs. Bitcoin Narrative: A surprise beat or miss on the core software business revenue could also be a catalyst. If the core business performs better than expected, it could provide a floor for the stock price even if Bitcoin is volatile.

Recent Events: The company has been active in the capital markets, recently completing a preferred stock offering to fund further Bitcoin acquisitions. The details of these transactions and their impact on the balance sheet will be important for traders to consider. Recent insider buying by a director also signals confidence, which could be a positive factor.

Summary

Strategy's upcoming Q2 2025 earnings report is expected to be a key event for investors. The analysis indicates two main areas of focus: the company's Bitcoin holdings and its core software business performance. Due to its significant Bitcoin treasury, MSTR's earnings will be heavily influenced by the fair value changes of its digital assets.

Analysts anticipate a record in unrealized profits driven by Bitcoin's price surge. The core business is also expected to show solid growth, particularly in subscription revenue. For short-term traders, MSTR's high volatility and strong correlation with Bitcoin's price offer potential opportunities, making the post-earnings movement a crucial event to watch.

For short-term trading, the key is to monitor the Bitcoin market closely, analyze the company's reported Bitcoin holdings and fair value accounting adjustments, and be prepared for significant volatility. The earnings call itself, and the tone of management's commentary, could provide valuable insights for a short-term trading strategy.

Appreciate if you could share your thoughts in the comment section whether you think MSTR could ride the Bitcoin rally during the Q2, provide a better accounting result based on its Bitcoin holdings.

@TigerStars @Daily_Discussion @Tiger_Earnings @TigerWire appreciate if you could feature this article so that fellow tiger would benefit from my investing and trading thoughts.

Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.