Technology

What to Expect From Square Earnings

Chris Lange

Square, Inc. (NYSE: SQ) is scheduled to report fourth quarter financial results after markets close on Wednesday, the first report for Square as a public company. The consensus estimates are calling for a net loss of $0.13 per share on $343.22 million in revenue.

This company entered the market in mid-November as one of the most anticipated initial public offerings (IPOs) of the year. CEO Jack Dorsey had made a name for himself by taking over the reins at Twitter Inc. (NYSE: TWTR) over the summer while still leading Square. Many investors did not know what to expect from this IPO, much less the stock.

Square was started in February 2009 to enable anyone with a mobile device to accept card payments, anywhere, anytime. While it found early success providing easy access to card payments, Square believes that commerce extends beyond payments. In every transaction, the company sees opportunity for its sellers to learn more about which products are selling best, to reinvest in their businesses or to create and engage loyal buyers. Although it currently generates roughly 95% of its revenue from payments and point-of-sale services, Square has extended its product and service offerings to include financial services and marketing services, all to help sellers start, run and grow their businesses.

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

  • SunTrust has an $11 price target.
  • RBC Capital reiterated an Outperform rating with a $15 price target.
  • BTIG Research reiterated a Buy rating with a $15 price target.
  • Pacific Crest initiated coverage with a Sector Weight rating and an $11 price target.

So far in 2016 Square has underperformed the broad markets with the stock down about 6% year to date.

Shares of Square were last trading down 2.6% at $11.95, with a consensus analyst price target of $13.42 and a 52-week trading range of $8.06 to $14.78.