$SQ – Square, Inc. – 2020 Research

Rating: Buy

Target Price: $170

Key Ratios:

EPS:  .18

P/E:  238

Debt/ Market Cap:  4.18%


Business Strategy & Outlook:

Since 2009, we believe Square has found its niche by attracting micro merchants and providing a product that is reliable and affordable for the average small business.  From a scalability standpoint, Square is basing its success on future growth and the ability to retain existing sellers.

In 2017, 2018, and 2020, Square has generated significant net losses, with an accumulated deficit of $627.7 million as of June 30,2020. We believe Square is making investments in their employees, sales & marketing, and research and development, to attract new or larger sellers which may be key to higher revenue streams and market share.

We predict Square’s revenue to rise 60% YOY, as they are making significant measures to increased diversity in their revenue base.  Square’s Bitcoin revenue for 2020 June 30th six months ended has grown 520% compared to the same period in 2019, with hardware revenues remaining the same, subscription-based revenue increasing 37% and transaction-based revenue increasing only .6%.

Seeing that their debt load is only 4.18% of their market cap, we are putting a buy rating on SQ, with a price target of $170.


Credit Updates:

For the three and six months that ended on June 30, 2020 and June 30, 2019, Square had no customer that accounted for greater than 10% of total net revenue.
As of June 30, 2020, they had an accumulated deficit of $627.7 million.


Products and Services:

  • Software product offerings include
  • Square for Restaurants
  • Square Point of Sale
  • Square Appointments
  • Square for Retail
  • Square Invoices
  • Square Virtual Terminal
  • Square Dashboard Weebly
  • Square Loyalty & Marketing
  • Square Payroll

Hardware product offerings

  • Magstripe Reader
  • Contactless Chip Reader
  • Square Stand
  • Square Register
  • Square Terminal




Technical Analysis: as of September 17, 2020

Using the 2-hour time frame, SQ has pulled back recently with the overall market. We reached a new all time high of $170.61 and pulling back down towards key support level $145. We are looking to see if we can hold this support level with secondary support at $140. We are seeking to be a buyer soon if we can maintain support levels. We seek to enter around the $145 / 140 level and start selling around $155 / 160 / 170 levels.


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