Block Inc (SQ)

[jfkspire]

https://www.barrons.com/articles/squares-roots-why-the-fintech-stocks-gains-can-multiply-1512678967?mod=BOL_da_rta

Square’s Roots: Why the Fintech Stock’s Gains Can Multiply

By Teresa Rivas

Updated Dec. 7, 2017 3:36 p.m. ET

Shares of Square (SQ) are higher on Thursday, helped in part by a bullish note from Jefferies.
Square’s Roots: Why the Fintech Stock’s Gains Can Multiply
Illustration: Jin Lee/Bloomberg

Analyst Ramsey El-Assal and his team reiterated a Buy rating and $47 price target on the stock today, following a meeting with Square's CFO Sarah Friar, writing that they're confident about the growth opportunities ahead of the fintech company.

El-Assal has four main takeaways from the meeting. First, he likes that Square is focused on balancing investing in its business while still delivering mid-single-digit margin expansion guidance for next year (returning excess margins back into the business). He also thinks that the company may approach positive GAAP earnings in 2018.

Secondly, there's bitcoin. (Maybe you've heard of it?) El-Assad writes that he had a demo of Square's newly announced expansion of its Bitcoin/Square Cash beta product and was impressed with how easy and simple it was to use.

Thirdly, he writes that he's encouraged that Square's product development is keeping pace with it's move up-market:

Our meeting included a demo of the new Square Retail module that contains differentiated capabilities like a customer data directory and more in-depth inventory management tools, both bundled directly into the POS (Square Retail costs merchants $60/month). We believe merchant demand is high for SQ’s seamlessly integrated suite of solutions and believe the launch of this product along with the continued growth of ancillary subscription and service revenue is important in stabilizing take rate as the company moves up-market, much like we saw in the most recent quarter.

Finally, he likes that Square is finally overcoming roadblocks to processing payments in Australia and Canada, which should lead to more adoption going forward: "We believe 40%-50% of total applicable payment volume in both Canada and Australia flows over domestic schemes such that SQ should get a nice demand bump when domestic schemes are included in the value proposition."

Square is up 2.3% to $38.53 in recent trading, and is up more than 180% this year.

Square







************SQ**************