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Square stock falls after Raymond James turns bearish
By: MarketWatch | January 29, 2019

Shares of Square Inc. SQ, -7.08% are down 3.4% in premarket trading Tuesday after Raymond James analyst John Davis downgraded the stock to underperform from market perform. "In short, we believe organic growth peaked in 3Q18 and growth on the all-important [subscription] and services line will likely materially decelerate in 2Q19 as slower growth acquisitions (Weebly + Zesty) move into the base," he wrote. "More importantly, we don't see another Instant Deposit-like growth driver on the horizon and believe significant top-line upside will likely prove more difficult in 2019." He estimates that Instant Deposit, which lets users pay a small fee for immediate access to their funds, added 1,500 basis points to the company's organic growth in 2018. Davis is also downbeat about Square's interest in an industrial-loan charter, which he believes would make Square's "already macro-sensitive business" even more cyclical. Square's stock has gained 13% over the past three months, as the S&P 500 SPX, +0.00% has risen 0.1%.

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