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Square, Inc. (SQ) Stock Guide

September 18, 2020
50
Bull Case
  • Revenue growth higher than the industry and sector averages
  • Company’s profitability is improving
  • Buy analyst rating
  • Cash/Debt ratio is higher than the industry and sector averages
Bear Case
  • Forward P/E ratio high relative to industry peers
  • Forward PEG ratio high relative to industry peers
  • High short share of float
  • High short interest

Before we start: if you're looking for SQ stock price, you can quickly find it out by visiting Finny and typing "SQ quote". If you're looking for a quick scoop on SQ stock (chart, price target, market cap, news and buy or sell analysis), go to Finny and look for "SQ". You'll get all this info in one place. Or you can just type "SQ news" to get the latest stock news.

Looking to buy or sell Square, Inc. (SQ)? Interested in getting the full scoop on SQ, including earnings and dividends, stock forecast, buy or sell analysis and key stats? If so, you came to the right place.

In this SQ stock guide, we'll address key questions about SQ, above and beyond what you can find on Yahoo Finance, Zacks, MarketWatch or Morningstar.

Here is what you'll be able to find in this guide:

Earnings and Dividends: earnings, earnings date, dividend rate and dividend yield;
Analyst Predictions: stock forecast and analyst ratings;
Analysis: Finny Score and buy or sell analysis;
Key Stats: revenue, market cap, revenue growth, profit margin, P/E ratio, P/B ratio, industry, sector, and number of employees.

And here is the list of questions we'll answer:
1. What are SQ earnings?
2. What is SQ stock forecast (i.e., prediction)?
3. SQ buy or sell? What is SQ Finny Score?
4. What are the reasons to buy SQ? Why should I buy SQ stock?
5. What are the reasons to sell SQ? Why should I sell SQ stock?
6. What are SQ key stats: revenue, market cap, revenue growth, profit margin, P/E ratio, P/B ratio industry, sector, and number of employees?

So let's start. Scroll down to the question that interests you the most.

Earnings and Dividends

1. What are SQ earnings?

SQ trailing 12-month earnings per share (EPS) is $0.65.

Analyst Predictions

2. What is SQ stock forecast (i.e., prediction)?

Based on SQ analyst price targets, SQ stock forecast is $146.42 (for a year from now). That means the average analyst price target for SQ stock is $146.42. The prediction is based on 31 analyst estimates.

The low price target for SQ is $41.00, while the high price target is $225.00.

SQ analyst rating is Buy.

Analysis

3. SQ buy or sell? What is SQ Finny Score?

Our quantitative analysis shows 4 reasons to buy and 4 reasons to sell SQ, resulting in Finny Score of 50.

4. What are the reasons to buy SQ? Why should I buy SQ stock?

Here are the reasons to buy SQ stock:

  • Square differentiates itself by offering a comprehensive commerce ecosystem enabling sellers to combine software, hardware and payments services from several vendors. The company’s managed payment solutions allow sellers to accept payment through a range of media such as magnetic stripe (a swipe), Near Field Communication (NFC), EMV (Europay, MasterCard, and Visa), online through Square Invoices, Square Virtual Terminal, or the seller’s website. Square’s powerful point-of-sale software and services help sellers manage locations, orders, inventory, employees, and payroll.
  • Square’s rate of growth has been impressive since it started operations eight years back. Today, it serves millions of sellers across various industries such as food, retail and services, and geographies including the U.S., Japan, Australia and Canada. It processed $23.8 billion, $35.6 billion and $49.7 billion of Gross Payment Volume (GPV) in 2014, 2015 and 2016, respectively.
  • Square is making an effort to turn around its ailing fortunes. The company made its first European venture in March 2017 with the launch of its mobile payment services in the U.K. It became the fifth market where Square services are now available after the U.S., Australia, Canada and Japan.
  • The company is currently focusing on integration, automation, and platform. On the integration front, Square aims to make its services more cohesive. In February 2017, it rolled out Square for Retail, its first industry specific point of sale.
  • SQ quarterly revenue growth was 63.80%, higher than the industry and sector average revenue growth (1.11% and 0.89%, respectively). See SQ revenue growth chart.
  • SQ profitability is improving. The YoY profit margin change was 7.21 percentage points. See SQ profitability chart.
  • SQ average analyst rating is Buy. See SQ analyst rating chart.
  • SQ cash to debt ratio is 1.01, higher than the average industry (0.16) and sector (0.17) cash to debt ratio. See SQ cash to debt chart.

5. What are the reasons to sell SQ? Why should I sell SQ stock?

Let's look at the reasons to sell SQ stock (i.e., the bear case):

  • Square has been incurring losses over the last few years. The company reported net loss of $154.1 million, $212 million and $171.6 million in 2014, 2015 and 2016, respectively. At the end of 2016, the company had an accumulated deficit of $779.2 million.
  • Growth depends and will continue to depend on the company’s ability to differentiate. Square is vulnerable to intense competition and changing technology, industry standards and seller and buyer needs. These call for frequent changes in product and service offerings, which in turn require heavy investments, putting pressure on its earning capacity.
  • The nature of its business makes Square vulnerable to foreign exchange risk. Apart from the U.S., the company operates in Canada, Australia and Japan and derives a significant part of its sales and earnings from there. Thus, appreciation or depreciation of the U.S. dollar versus foreign currencies could impact the company’s results.
  • Square will not pay dividends in the foreseeable future and wishes to channelize future earnings toward operation and business expansion. Consequently, investors will not receive return on their investments if price of the company’s common stock increases. Investors seeking cash dividends should avoid buying Square shares.
  • SQ forward P/E ratio is 137.74, which is high compared to its industry peers’ P/E ratios. See SQ forward P/E ratio chart.
  • SQ PEG ratio (P/E adjusted for growth) is 8.51, which is high compared to its industry peers’ PEG ratios. See SQ PEG chart.
  • SQ short share of float is 7.19%. The stock is much more frequently shorted than the average industry, sector or S&P 500 stock. See SQ short share of float chart.
  • SQ short interest (days to cover the shorts) ratio is 2.19. The stock garners more short interest than the average industry, sector or S&P 500 stock. See SQ short interest ratio chart.

Key Stats

6. What are SQ key stats : revenue, market cap, revenue growth, profit margin, P/E ratio, P/B ratio industry, sector, and number of employees?

Let's look at the key statistics for SQ:

Metrics SQ
Price $164.81
Average Price Target / Upside $146.42 / -11.16%
Average Analyst Rating Buy
Forward Dividend Yield 0.00%
Industry Software - Application
Sector Technology
Number of Employees 3,349
Market Cap $73.92B
Forward P/E Ratio 137.74
Price/Book Ratio 12.56
Revenue (TTM) $5.88B
YoY Quarterly Revenue Growth 63.80%
Profit Margin 5.15%

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