Bears on MicroStrategy’s (MSTR) high stock price thanks to its perky valuation compared to the amount of its bitcoin (BTC) holdings are overlooking the company’s “unique” shareholder value, investment banking firm Benchmark said in a research report on Friday.

“We believe the ability of MSTR to generate compounding yield on its bitcoin holdings, using what management describes as “intelligent leverage,” differentiates its stock from alternative means of gaining exposure to bitcoin such as spot bitcoin ETFs,” Benchmark analyst Mark Palmer wrote.

Already bullish on the stock, Palmer reiterated his buy rating and lifted his price target to $245 from $215. Alongside a rise in the price of bitcoin to $68,400, MSTR shares are higher by 6.6% Friday to $206.19.

Led by Executive Chairman Michael Saylor, the stock of self-described Bitcoin Development Company currently trade at a 2.4X premium to the value of its bitcoin holdings, with some traders thusly believing that holding the equity instead of BTC itself (or the spot ETFs) is a bad move.

MicroStrategy’s net asset value (NAV) is calculated by dividing MSTR's market capitalization by the value of its bitcoin stack. The NAV premium recently touched a new high of 2.5 times its bitcoin holdings, with a company market cap north of $41 billion against bitcoin holdings of around $17 billion.

Benchmark believes MicroStrategy’s business model justifies the premium to NAV and that traders should focus on the company’s BTC Yield. Introduced by Saylor and team earlier this year, Bitcoin Yield tracks the effectiveness of bitcoin investments by measuring the percentage change over time of the ratio between MSTR’s bitcoin holdings and its fully diluted share count. The Bitcoin Yield stood at 17.8% through September 19 compared to 1.8% and 7.3% in 2022 and 2023, respectively, according to Benchmark’s data.

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