How Did Square Stock Stand Up to COVID-19 in Q1?
Merchant services and mobile payment company Square is scheduled to release its most recent quarterly results after the markets close on Wednesday.
Square Inc. (NYSE: SQ) is scheduled to release its most recent quarterly results after the markets close on Wednesday. The first-quarter consensus estimates are calling for $0.13 in earnings per share (EPS) and $620.34 million in revenue. In the same period of last year, this merchant services and mobile payment company said it had $0.11 in EPS and $959.4 million in revenue.
The company issued a release in March about the impact of the coronavirus pandemic on its business. Prior to the impact of COVID-19 in the United States, Square achieved strong growth during the first two months of the quarter. In January and February, gross profit increased 47% year over year, or 51% excluding Caviar from the 2019 period, driven by momentum across both its Seller and Cash App ecosystems. In January and February, Seller ecosystem gross profit grew 32% year over year and Cash App ecosystem gross profit grew 118%.
Beginning in March, the effects of COVID-19 began to affect the company’s growth, in particular due to a slowdown in gross processing volume for its Seller ecosystem. This offset relative strength in the Cash App ecosystem, where the impact on gross profit growth was less pronounced.
As a result, Square is revising its growth expectations for the first quarter of 2020 and now expects to report total net revenue in the range of $1.30 billion to $1.34 billion and gross profit of $515 million to $525 million.
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Excluding Wednesday’s move, Square stock had outperformed the S&P 500 and Dow Jones industrial average with a gain of about 7% year to date. In the past 52 weeks, the share price was down 5%.
A few analysts weighed in on Square ahead of the report:
- KeyCorp has an Overweight rating and a $70 price target.
- Compass Point has a Sell rating with a $50 price target.
- Raymond James has an Underperform rating.
- UBS has a Neutral rating and a $54 price target.
- BTIG has a Hold rating.
Square stock traded up about 3% at $68.55, in a 52-week range of $32.33 to $87.25. The consensus price target is $62.74.
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Chris Lange is a financial and geopolitical writer with more than a decade of experience covering a myriad of topics. He has published thousands of articles for 24/7 Wall St., with past coverage focused heavily on stocks, IPOs, healthcare, defense, global affairs, and technology.
His work has been quoted, or referenced by a number of outlets including Business Insider, USA Today, Yahoo Finance, MSN, The Motley Fool, and many other publications. A graduate of Southwestern University, he studied business with a focus on investments and has previous experience in banking and startups.
When not reading or writing the news, he is following his passion for Lacrosse, playing chess, or building solar projects with his dad.
