IB Net Payout Yields Model

Square: Attractive For First Time In Years

Square gets 45% of GPVs from sellers generating under $125,000 in sales.
The payments company is likely to see customers go out of business.
My base case is 0% revenue growth in 2020 and a return to only 15% growth in 2021.
The stock is a buy at 7x '21 adjusted revenues with potential upside to estimates.
The Covid-19 outbreak and the shutdown of the global economy has investors fleeing Square (NYSE:SQ). The mobile payment company is highly dependent on small business customers, and the economic slowdown is going to hit their customer base the hardest. Just weeks ago, my view on the stock was negative with the price back above $80, and now, the stock is far more appealing after a 50% collapse in a matter of weeks.
Read the full article on Seeking Alpha. 
Update March 25, 2020
The company updated Q1 guidance to only slightly below original forecasts. The stock has already soared on the backs of the agreement on a stimulus deal to help small business. The view on Square is more neutral up at $55. 
-Square soars 19% after the Senate and White House reach an agreement on a relief plan that includes $350B in assistance to small business and after an upgrade by Nomura Instinet analyst Bill Carcache.

Disclosure: No position. Please review the disclaimer page for more details. 


Anonymous said…
Not very logical

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