Technology

What Analysts Are Saying About Square After Earnings

Chris Lange

Published: August 7, 2016 10:10 am

Last Updated: January 13, 2020 4:51 am

When Square Inc. (NYSE: SQ) released its second-quarter earnings report after the markets closed on Wednesday, overall the results were impressive. The stock saw a handy gain, counteracting what has been a somewhat weak 2016. 24/7 Wall St. has included some of the key highlights from the earnings report, as well as what analysts are saying after the fact.

The company said that it had a net loss of $0.08 per share on $439 million in revenue. The consensus estimates from Thomson Reuters called for a net loss of $0.11 per share on revenue or $405.7 million. Square posted EPS of $0.20 in EPS and $310 million in revenue in the same period of the previous year.

Gross payment volume (GPV) for the second quarter was $12.5 billion, up 42% year over year. New seller growth made up the majority of the GPV increase, while positive dollar-based retention from existing sellers also had a meaningful impact. At the same time, transaction revenue as a percentage of GPV was 2.93%.

Adjusted revenue totaled $171 million, up 54% from last year, also exceeding the high end of previously issued guidance. Starbucks transaction revenue totaled $32.87 million.

In terms of guidance for the third quarter, Square 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. Consensus estimates call for a net loss of $0.10 per share on $415 million in revenue for the quarter.

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

• Canaccord Genuity has a Hold rating and raised its price target to $14 from $13.
• CLSA has a Buy rating and raised the price target to $15 from $14.
• Compass Point has a Buy rating and raised its price target to $14.
• Craig-Hallum has a Hold rating and increased its price target to $8 from $7.50.
• Deutsche Bank reiterated a Hold rating.
• Evercore ISI has a Hold rating and raised its price target to $8 from $7.
• S&P reiterated its Hold rating but raised its price target to $12 from $11.
• SunTrust Robinson Humphrey has a Neutral rating and raised price target to $13 from $11.
• Wedbush Securities has a Neutral rating and increased its price target to $10 from $8.

Shares of Square ended trading on Friday down about 1.5% at $11.15, with a consensus analyst price target of $12.92 and a 52-week trading range of $8.06 to $15.91.