Square Looks Expensive. Is it Actually Undervalued?
Square (NYSE: SQ) is a fintech company that rose to prominence by creating a mobile credit card reader, allowing businesses to accept payments with a phone or tablet. Since then, the company has added adjacent services such as online bookings, business financing, payroll, and instant transfer of funds through its Cash App.
Square had its initial public offering in late 2015 and traded at approximately $12 for most of its first month. The stock began a meteoric rise in 2016, reaching an all-time high just short of $100 in September 2018. Shares have since calmed down due to uninspiring guidance, and Square is now trading around $64.
The company has been notching impressive growth figures, with a more than 25% expansion in payment volumes and 37% annual revenue growth. Investors are excited about future opportunities through Cash App, which is offering consumers opportunities to invest small amounts inexpensively in publicly traded equities and cryptocurrency. This is a highly competitive space, but leaders among young users have a clear advantage. Analysts are calling for between 25% and 30% annual expansion in the medium term.
Source Fool.com
