Square Investors Getting Nauseous From All The Stocks Ups And Downs

Square Inc (NYSE: SQ) is scheduled to report its Q3 results after the market close on November 1. Square’s shares are unlikely to appreciate unless the company reports strong results and raises its FY16 adjusted, BTIG’s Mark Palmer said in a report, while reiterating a Neutral rating.

The company’s shares have been on a roller-coaster, with sharp gains and steep drops. They achieved a high of $15.48 on April 12, after bottoming at $8.37 on February 8.

Results Impact Share Price

Analyst Palmer pointed out that Square’s shares had gained 13 percent after the company posted robust Q2 results on August 3. Adjusted EBITDA had come in at $13 million, significantly higher than the consensus estimate of $243K. Square had also raised its adjusted EBITDA guidance for FY16 from $8-$14 million to $18-$24 million.

The company had delivered broad-based positive results for Q2, with all key metrics moving “in the right direction,” Palmer mentioned. He added, “So with expectations raised by SQ’s 2Q16 report, we believe anything less than a solid 3Q16 adjusted EBITDA beat and FY16 adjusted EBITDA guidance raise may not be enough to spur additional meaningful share price appreciation.”

For Q3, the analyst expects Square to report its adjusted EBITDA at $5.3 million, short of the current consensus estimate of $6.9 million.

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