If You Invested $1,000 In Square Stock One Year Ago, Here's How Much You'd Have Now

Investors who have owned stocks in the last year have generally experienced some big gains. In fact, the SPDR S&P 500 SPY total return over the last 12 months is 39.1%. But there is no question some big-name stocks performed better than others along the way.

Square’s Big Run: One company that has been a great investment in the last year has been digital payments giant Square Inc SQ.

Unlike many other companies, the COVID-19 pandemic in 2020 didn’t hurt Square’s business. In 2019, Square reported 81 cents in adjusted EPS on $4.71 billion in revenue. In 2020, EPS dropped to 44 cents, but revenue grew to $9.49 billion.

In fact, economic shutdowns around the world facilitated a broad shift from cash toward digital payments, creating a tailwind for Square and other online and mobile payment apps. The more than $6 trillion in U.S. government stimulus measures also triggered concerns over rising inflation levels.

As a result, cryptocurrency prices soared, which was great news for Square’s Bitcoin BTC/USD holdings. Square’s Cash App Investing service also benefited from a boom in retail trading activity in 2020, particularly in the crypto space.

At the beginning of 2020, Square shares were trading at $62.99. By the beginning of March, the stock was up to $82.80 despite news of the coronavirus spreading in China prompting concerns about a U.S. pandemic.

Square bottomed at $32.33 during the pandemic-driven March sell-off. Fortunately for Square investors, the dip did not last long.

By the end of June, Square shares were back at new all-time highs above $100, but Square wasn’t done there. By November, Square had doubled off that level and was trading above $200 for the first time.

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Square In 2021, Beyond: Square ultimately made it to a new all-time high of $283.19 in February 2021, but the stock has consolidated in a wide range of between around $200 and $280 ever since. Square’s highs correlated roughly with the peak in the Bitcoin rally, and investors may be concerned that a repeat of Bitcoin’s disastrous 2018 could be coming again in the second half of 2021.

Traders may continue taking profits in the stock after a big run since the start of 2020. They may also be concerned about regulatory crackdowns on big tech stocks. A potential rotation our of growth stocks and into value stocks could also weigh on Square’s performance. The stock currently trades at 8.1 times sales and 114.7 times forward earnings, suggesting some very high expectations are already priced in.

In addition, some sellers may simply see 2020 pandemic comps setting Square up for some lackluster growth numbers in coming quarters.

Still, Square investors who bought one year ago and held on have generated a nice return on their investment. In fact, $1,000 in Square stock bought on July 12, 2020, would be worth about $1,900 today.

Looking ahead, analysts are expecting more upside for Square in the next 12 months. The average price target among the 37 analysts covering the stock is $281, suggesting 15.5% upside from current levels.