What to Look for in Square Earnings

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Square Inc. (NYSE: SQ) is set to report its third-quarter financial results after the markets close on Tuesday. Thomson Reuters has consensus estimates that are calling for a net loss of $0.11 per share and $430.09 million in revenue. The earnings from its second quarter of 2016, totaled a net loss of $0.08 per share and $439 million in revenue.

In terms of guidance for the third quarter, Square said that it expects to have revenues in the range of $410 million to $420 million, with adjusted revenue in the range of $167 million to $171 million.

After its previous earnings report, the stock saw a handy gain, counteracting what has been a somewhat weak 2016. The mobile-payments company posted incredible results for the quarter and shareholders were quick to applaud these numbers, initially sending the stock up over 10%.

In the second quarter, Square continued to innovate, launching several new products, including Scheduled Invoices, Recurring Invoices and Card on File, which allows a seller to save a buyer’s card for future billing. The company has since made further developments in the third quarter.

As of the second quarter, 140,000 active sellers use Invoices, representing 122% growth since the second quarter of 2015. Additionally, Square has reached $2.3 billion of cumulative GPV from Invoices since the product launched in June 2014, with $542 million processed in the second quarter of 2016.

A few analysts weighed in on Square ahead of the earnings report:

  • BTIG Research reiterated a Neutral rating.
  • Credit Suisse has a Neutral rating with a $12 price target.
  • Keefe Bruyette & Woods reiterated a Market Perform rating with a $13 target.
  • Pacific Crest reiterated a Hold rating.
  • Jefferies reiterated a Buy rating with a $15 price target.
  • Stifel has a Buy rating with a $15 price target.

So far in 2016, Square has underperformed the broad markets, with the stock down about 14.6%. Over the past 52 weeks, the number is identical.

Shares of Square were trading at $11.18 on Tuesday, with a consensus analyst price target of $12.93 and a 52-week trading range of $8.06 to $15.91.