Deciphering Square’s comprehensive valuation
Square’s EV-to-adjusted EBITDA (enterprise value-to-adjusted earnings before interest, tax, depreciation, and amortization) ratio for the trailing 12 months is 352.7x. Its EV-to-estimated EBITDA ratio is 70.4x. Square’s EBITDA margin for 2017 is 2%.
The company’s EV-to-sales ratio for the trailing 12 months is 7.9x, while its expected 2018 EV-to-sales ratio is 10.2x.
Square’s trailing-12-month EV-to-cash flow and trailing-12-month EV-to-free cash flow are 138.4x and 173.9x, respectively.
Inside Square’s price metrics
With a book value per share of $2.02, Square is trading at a price-to-book value of 23.1x. The stock’s estimated book value per share for 2018 is $1.4.
Square’s price-to-sales ratio is 8.2x, while its estimated 2018 price-to-sales ratio is 13.5x.
Earnings and sales
Square reported EPS (earnings per share) of -$0.17 in 2017. Its EPS for 2018 are expected to be $0.45. Its EPS for 2017 came in on total sales of $2.2 billion, a rise of 30% annually. Its sales for 2018 are expected to rise to $1.7 billion.
Of the 32 analysts covering Square, 17 have given it “buy” recommendations, two have recommended “sells,” and 13 have recommended “holds.” Analysts’ stock price target for the company is $48.97, and their median price target for the company is $50.
Square’s debt, ratios, and ratings
Square reported total capital of $1.2 billion and total debt of $359 million in 2017, leading to total debt-to-total capital of 31.4%. Its debt-to-asset ratio is 0.16, while its debt-to-equity ratio is 45.6. Its debt-to-EBITDA and debt-to-EV ratios came in at 7.16 and 2, respectively.