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What to Look for in Square Earnings

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By Chris Lange Updated Published
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What to Look for in Square Earnings

© courtesy of Square Inc.

Square Inc. (NYSE: SQ) is set to report its third-quarter financial results after the markets close on Tuesday. Thomson Reuters has consensus estimates that are calling for a net loss of $0.11 per share and $430.09 million in revenue. The earnings from its second quarter of 2016, totaled a net loss of $0.08 per share and $439 million in revenue.

In terms of guidance for the third quarter, Square said that it expects to have revenues in the range of $410 million to $420 million, with adjusted revenue in the range of $167 million to $171 million.

After its previous earnings report, the stock saw a handy gain, counteracting what has been a somewhat weak 2016. The mobile-payments company posted incredible results for the quarter and shareholders were quick to applaud these numbers, initially sending the stock up over 10%.

In the second quarter, Square continued to innovate, launching several new products, including Scheduled Invoices, Recurring Invoices and Card on File, which allows a seller to save a buyer’s card for future billing. The company has since made further developments in the third quarter.

[nativounit]

As of the second quarter, 140,000 active sellers use Invoices, representing 122% growth since the second quarter of 2015. Additionally, Square has reached $2.3 billion of cumulative GPV from Invoices since the product launched in June 2014, with $542 million processed in the second quarter of 2016.

A few analysts weighed in on Square ahead of the earnings report:

  • BTIG Research reiterated a Neutral rating.
  • Credit Suisse has a Neutral rating with a $12 price target.
  • Keefe Bruyette & Woods reiterated a Market Perform rating with a $13 target.
  • Pacific Crest reiterated a Hold rating.
  • Jefferies reiterated a Buy rating with a $15 price target.
  • Stifel has a Buy rating with a $15 price target.

So far in 2016, Square has underperformed the broad markets, with the stock down about 14.6%. Over the past 52 weeks, the number is identical.

Shares of Square were trading at $11.18 on Tuesday, with a consensus analyst price target of $12.93 and a 52-week trading range of $8.06 to $15.91.

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About the Author Chris Lange →

Chris Lange is a writer for 24/7 Wall St., based in Houston. He has covered financial markets over the past decade with an emphasis on healthcare, tech, and IPOs. During this time, he has published thousands of articles with insightful analysis across these complex fields. Currently, Lange's focus is on military and geopolitical topics.

Lange's work has been quoted or mentioned in Forbes, The New York Times, Business Insider, USA Today, MSN, Yahoo, The Verge, Vice, The Intelligencer, Quartz, Nasdaq, The Motley Fool, Fox Business, International Business Times, The Street, Seeking Alpha, Barron’s, Benzinga, and many other major publications.

A graduate of Southwestern University in Georgetown, Texas, Lange majored in business with a particular focus on investments. He has previous experience in the banking industry and startups.

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