Is Square Poised to Take Off With Q4 Results?

Square Inc. (NYSE: SQ) is scheduled to release its fourth-quarter financial results after the markets close on Wednesday. The consensus estimates are calling for $0.21 in earnings per share (EPS) and $593.07 million in revenue. The same period of last year reportedly had $0.14 in EPS and $464.25 million in revenue.

The company previously issued guidance for the fourth quarter, in which the company said that it expects to see EPS in the range of $0.19 to $0.21 and revenue between $585 million and $595 million.

In the third quarter, gross payment volume (GPV) increased 25% year over year to $28.2 billion. The GPV from larger sellers grew 34% year over year and accounted for 55% of total GPV, up from 52% in the third quarter of 2018.

At the same time, transaction-based revenue was $817 million, up 25% year over year, and transaction-based profit was $297 million, up 23%.

Subscription and services-based revenue totaled $281 million in the third quarter, up 68% year over year. Also, subscription and services-based gross profit came to $216 million, up 82% in the same period. Hardware revenue was $22 million, up 24% year over year, and hardware generated a gross loss of $14 million.

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Excluding Wednesday’s move, Square stock had underperformed the broad markets with the share price relatively flat over the past 52 weeks. In the past quarter alone, the shares are up 14%.

Here’s what a few analysts had to say ahead of the report:

• Credit Suisse reiterated an Outperform rating.
• Citigroup has a Buy rating with a $99 price target.
• KeyCorp has an Overweight rating and a $90 price target.
• Merrill Lynch has a Buy rating with an $89 price target.
• Berenberg’s Hold rating comes with a $67 price target.
• RBC has a Buy rating with a $78 target price.
• Stephens rates it as Overweight with a $78 price target.

Square stock traded up about 2.5% at $78.98 a share on Wednesday, in a 52-week range of $54.41 to $87.25. The consensus price target is $76.22.

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