Back to top

Image: Shutterstock

Square (SQ) Q4 Earnings to Gain From Portfolio Strength

Read MoreHide Full Article

Square, Inc. (SQ - Free Report) is slated to report fourth-quarter 2020 results on Feb 23.

The company’s robust financial services portfolio is expected to have contributed to the fourth-quarter performance.

Moreover, its friendly ecosystem, which enables sellers to combine software, hardware and payments services in order to accept payment from customers, is expected to have enabled it in maintaining solid momentum across sellers.

Click here to know how the company’s overall fourth-quarter results are likely to be.

Square, Inc. Revenue (TTM)


Square, Inc. Revenue (TTM)

Square, Inc. revenue-ttm | Square, Inc. Quote

Portfolio Strength: Key Catalyst

Gains from Square’s portfolio strength are anticipated to get reflected in the fourth-quarter results.

In the to-be-reported quarter, the company made its kitchen display system software called Square KDS generally available for restaurants of all sizes. The software is well-equipped to improvise ticket times, and enhance front and back of house communications of restaurants.

We believe that Square KDS is likely to have aided the company’s momentum across restaurant sellers in the fourth quarter.

The company also made Terminal API generally available. Notably, Terminal API is its advanced developer tool that allows the connection of Square Terminal with developers’ POS, ERP or practice management system.

Further, Square Appointments was made available on Square Register, which expanded the company’s POS portfolio. This, in turn, is expected to have helped Square in delivering enhanced customer experience.

Apart from these, the growing adoption of Cash App in the bitcoin space is likely to have remained the key growth driver and accelerated Square’s bitcoin revenues in the quarter under review.

Furthermore, the company’s expanding omni-channel offerings, which aid sellers in managing their orders from the point of sale and eliminate manual aggregation of online and in-personorders, are expected to have strengthened the seller base in the quarter to be reported.

Moreover, gains from Square’s strong product lines such as Square Online Store, Invoices, Virtual Terminal and eCommerce API are expected to get reflected in fourth-quarter revenues.

Impacts of all the above-mentioned products are likely to get reflected in the company’s fourth-quarter gross payment volume (GPV).

The Zacks Consensus Estimate for fourth-quarter GPV is pegged at $35.9 billion, which suggests growth of 25.5% from the year-ago quarter’s reported figure.

Zacks Rank & Stocks to Consider

Currently, Square carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader technology sector are CrowdStrike Holdings Inc. (CRWD - Free Report) , Workday, Inc. (WDAY - Free Report) and Analog Devices, Inc. (ADI - Free Report) , each presently carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Long-term earnings growth rates for CrowdStrike, Workday and Analog Devices are currently pegged at 25%, 25.36% and 12.25%, respectively.

5 Stocks Set to Double

Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.

Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.

Today, See These 5 Potential Home Runs >>

Published in