Here's What Will Drive Future Shareholder Value For Square

Square Inc SQ has seen solid returns in 2017 thus far, with shares rising over 46 percent year to date. Tigress Financial Partners is initiating coverage on the payment processor with a Buy rating.

Justification For The Rating

“Square’s leading market position driven by its innovative technologies and comprehensive commerce ecosystem will continue to drive significant growth and accelerating Business Performance,” said Tigress analyst Ivan Feinseth.

The firm expects Square’s ongoing investment in new technology will continue to increase market share penetration and drive future revenue growth. Although analysts believe Square is trading at a premium valuation, the integration of new products in its increasingly automated platform will drive future shareholder value.

Square’s gross payment volume growth continues to show promise, showing double-digit increases every year since 2014. Tigress financial believes that 2017 GPV will increase 20 percent to $60 billion, nearly triple the volume in 2014.

“The adoption of larger transactions from sellers will continue to increase as SQ has successfully positioned itself as a main stream payment process provider with its tablet-based POS system, not only for processing payments but for managing order flow as well,” explained Feinseth.

“SQ’s key value proposition to its customers are tools that help them grow and better manage their businesses. This will be the key driver of SQ’s sustainable growth.”

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