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International Expansion Likely to Aid Square (SQ) Q4 Earnings

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Square Inc. SQ is set to report fourth-quarter 2017 results on Feb 27.

The company’s expanding international footprint is anticipated to be a significant growth driver owing to the increasing demand for payments processing and mobile-commerce services among small businesses globally.

Aggressive push into countries like Australia, the United Kingdom and Japan is likely to boost top-line growth.

We note that the launch of Square Stand for contactless and chip in Australia is likely to boost customer base in the country.

Square, Inc. Price and EPS Surprise

Square, Inc. Price and EPS Surprise | Square, Inc. Quote


Moreover, Square also launched the reader in Canada, which enabled sellers to accept contactless payments, including Apple Pay, Android Pay, and Interac Flash. The addition of Interac Flash is likely to bolster Square’s adoption rate in the country.

Currently, Square has a Zacks Rank #3 (Hold). The Zacks Consensus Estimate for revenues and earnings is currently pegged at $601.6 million and 7 cents, respectively.

Click here to know how the company’s overall fourth-quarter performance is expected to be.

Growing Mid-Market Sellers to Drive Profitability

The increasing percentage of higher-margin mid-market and larger sellers in Gross Payment Volume (“GPV”) is likely to expand profitability.

Square defines larger sellers as those who make more than $125,000 of annualized GPV and midmarket sellers as those who make more than $500,000 of annualized revenues.

In the third quarter, GPV from large sellers (48% of total GPV) increased 44%, while GPV from midmarket sellers escalated 64% from the year-ago quarter.

Stocks to Consider

Better-ranked stocks in the broader technology sector are NVIDIA Corporation NVDA, Lam Research Corporation (LRCX - Free Report) and Paycom Software PAYC, all  sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Long-term earnings growth for NVIDIA, Lam Research and Paycom is projected to be 10.3%, 14.9% and 10%, respectively.

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