Square’s Earnings Report: Analysts’ Opinion

Square, Inc. $SQ is going to report third-quarter 2018 results today (Nov 7) after the market closes. So what are the analysts saying prior to the drop?

Citi Research analyst Peter Christiansen upgraded the stock to buy from neutral, citing its impressive growth potential. Christiansen also put a $90 price target on Square shares, which marks a 20% upside from Monday’s closing price of $75.01 per share. Overall, Square’s shares are down 18% over the past month, while the S&P 500 SPX, +0.63% has slipped 5%.

“We think Square is a category leader in the democratization of enterprise resource planning-like software tools for small- and medium-sized businesses and potentially a player in developing banking tools for the next-generation consumer,”

Peter Christiansen, Citi Research

According to Zacks, there are three factors that are likely will have an influence on the company’s growth:

  • The company is focused on delivering a better payment experience to the sellers and customers on the back of its innovative financial services. That will continue aiding Square’s market position in the global digital payment space.
  • The company remains well poised to cater to the growing demand for payments processing and mobile-commerce services among small businesses worldwide, thanks to its expanding product and services portfolio.
  • Square’s seller friendly ecosystem is also a major catalyst that enables the sellers to combine software, hardware and payments services in order to accept payment from the customers through its wide range of online payment products.

Last year, SQ reported better-than-expected third-quarter 2017 results, beating the Zacks Consensus Estimate on both counts. Revenues came well ahead of the guided range of $562 million – $568 million and  EPS came ahead of the guided range of 4 cents to 5 cents.

Wall Street’s Estimates

EPS (Average Estimate): $413.67M

Q3 Revenue (Average Estimate): $0.11/share

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