Market Overview

4 Takeaways On Square From Nomura

Share:
4 Takeaways On Square From Nomura

Square, Inc. (NYSE: SQ) reported third-quarter earnings Nov. 7 that beat estimates for both sales and earnings. The company raised its fourth-quarter guidance and conducted investor relations meetings in New York City.

The Analyst

Nomura analyst Dan Dolev maintained a Buy rating on Square and lowered the price target from $125 to $107. 

The Thesis 

Dolev named four takeaways from Nomura's recent meetings with Square. (See the analyst's track record here.)

They are: 

  • The surprising success of the Cash App. This contributed directly to Square's increased revenue guidance over 2017, Dolev said. 
  • Square's long-term expectations for the Cash App. The application is destined to cater to the underbanked, the analyst said. 
  • “Management’s holistic view of the Caviar food ordering platform.” Earlier this year, Square launched a new restaurant point-of-sale system integrated with Caviar, the delivery service the company acquired in 2014.
  • “Success with large customers helping sustain the three-to-four-quarter payback period, and nurturing a balanced approach to investments.”

Nomura lowered its 2019 earnings guidance from $508 million to $464 million.

Competition

Square competes with big payments players like PayPal Holdings, Inc. (NASDAQ: PYPL)’s Venmo and Zelle, and several fintech startups entered the space, including companies like Stripe, Dwolla, Slim Pay, Cheddar Up and WePay.

Price Action

Square shares have fallen roughly 17 percent in the last month and declined 10 percent Monday. This stock movement comes amid the early departure of CFO Sarah Friar as well as the sell-off in several tech stocks of late.

The stock was down 1.64 percent at $61.96 at the time of publication Tuesday afternoon. 

Related Links:

Barclays Initiates Coverage Of Payments Sector, Names PayPal As Top Pick

Square's Guidance Miss: Analysts Speak Up

Photo courtesy of Square. 

Latest Ratings for SQ

DateFirmActionFromTo
Sep 2019MaintainsOverweight
Sep 2019UpgradesSellHold
Sep 2019DowngradesBuyHold

View More Analyst Ratings for SQ
View the Latest Analyst Ratings

Posted-In: cheddar up Dwolla Nomura paymentsAnalyst Color Price Target Reiteration Analyst Ratings Best of Benzinga

 

Related Articles (PYPL + SQ)

View Comments and Join the Discussion!

Latest Ratings

StockFirmActionPT
HRIGoldman SachsUpgrades60.0
ERICDZ BankUpgrades
RUTHPiper JaffrayMaintains22.0
DRIPiper JaffrayReiterates128.0
SWKSBenchmarkInitiates Coverage On94.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Trading Daily
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Daily Analyst Rating
A summary of each day’s top rating changes from sell-side analysts on the street.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at vipaccounts@benzinga.com

This Leveraged ETF Rapidly Became One Of November's Best

What To Make Of L Brands' Q3, Leadership Change, Dividend Reduction