uploads///stock exchange _

Square Stock Fell after Quarterly Results


Dec. 4 2020, Updated 10:53 a.m. ET

Square reported first-quarter results

Mobile payment processing company Square (SQ) fell 8% on May 2 to close trading at $67.74. The stock is currently trading 46% above its 52-week low of $46.50 and 33% below its 52-week high of $101.15.

Square announced its first-quarter results on May 1 and reported revenue of $489 million, a rise of 53% YoY. Non-GAAP (generally accepted accounting principles) EPS rose by 83.3% YoY to $0.11 in the first quarter.

Sign up for Bagels & Stox, our witty take on the top market and investment news, straight to your inbox! Whether you’re a serious investor or just want to be informed, Bagels & Stox will be your favorite email.

Wall Street expected Square to post revenue of $479.4 million with EPS of $0.08 in the first quarter. So why did the stock tank despite an earnings beat?

Article continues below advertisement

Weak guidance left analysts and investors unimpressed

Square reported gross payment volume (or GPV) of $22.6 billion. Though this metric rose 27%, it was marginally below analyst estimates of $22.8 billion. Square also provided mixed guidance for 2019 that did not sit well with investors.

Square stated that it expects revenue between $545 million and $555 million in the second quarter. Adjusted EBITDA is estimated between $90 million and $94 million with non-GAAP EPS between $0.04 and $0.16 in Q2 2019. These figures were below Wall Street sales and earnings estimates of $557 million and $0.18, respectively. For 2019, Square in fact, raised its guidance and expects sales between $2.25 billion and $2.28 billion, up from the prior forecast between $2.22 billion and $2.25 billion. Analysts expect Square’s revenue to rise 42.5% to $2.26 billion in 2019.

Square’s drop in stock has meant that the stock is trading 22.5% below analysts’ 12-month target estimates of $83.0. Out of 31 analysts covering Square, 17 have “buy” recommendations, and 14 have “hold” recommendations for the stock. There are no “sell” recommendations.


More From Market Realist

    • CONNECT with Market Realist
    • Link to Facebook
    • Link to Twitter
    • Link to Instagram
    • Link to Email Subscribe
    Market Realist Logo
    Do Not Sell My Personal Information

    © Copyright 2021 Market Realist. Market Realist is a registered trademark. All Rights Reserved. People may receive compensation for some links to products and services on this website. Offers may be subject to change without notice.