Out Fox The $treet

Square rallies near yearly highs after Q1 results. The company should report a large decline in Q2 payments volumes and an EBITDA loss. The stock trades at an insane 65x normalized EBITDA targets that are unlikely to be obtainable even in 2021. Despite the obvious long-term impact of the coronavirus to  Square  ( SQ ) small business customers, the stock is now back close to yearly highs. The company faces a tough road ahead with a material impact to business in the current quarter and a questionable future. My  investment thesis  was bullish on a rebound at the lows near $40, but the stock is no longer appealing above $75. Read the full article on Seeking Alpha.  Disclosure: No position mentioned. Please review the disclaimer page for more details. 

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...

Square rallied following soft 2020 guidance due likely to a confusion over net and adjusted revenues. Revenue guidance suggests only 25% growth this year. The stock trades at a very rich 76x EBITDA targets. Square  ( SQ ) has a lot of moving parts in their revenue numbers so the stock rallying on Q4 numbers and more specifically on disappointing 2020 guidance has investors chasing false revenue hype again. Despite the U.S. stock markets crashing over 10%, the stock is near recent highs. My  investment thesis  remains negative at this valuation due to the likelihood the market doesn't understand the presented revenue metrics and the ramifications. Read the full article on Seeking Alpha.  Disclosure: No position. Please review the disclaimer page for more details. 

Square shareholders have to reset expectations with the stock down $50 from the highs. Decelerating revenue growth trends will not be helped by a slowdown in the economy. The stock still trades at an elevated 12x '19 sales estimates. Despite obvious valuation issues,   Square   ( SQ ) investors were riding the stock higher above $100 earlier this year. The mobile payments provider traded at a market valuation approaching $50 billion while the company only guided adjusted revenues to $1.57 billion for the year. My   previous article   discussed that even a dip to the recent price of $50 would leave the stock in a stretched valuation so investors need to be careful chasing the stock here. Read the full article at Seeking Alpha.  Disclosure: No position mentioned. Please review the disclaimer page for more details.   

One of the bigg est momentum trades coming out of the market correction of 2018 will likely be Square (SQ) . The mobile payments firm dipped an incredible $50 or 50% from the peak in September over $100. The stock bounced off strong support around $50. 

Square actually traded down following a big Q3 beat. A lot of the negative signal from prior to the quarter contributed to the weakness in the stock. The market has missed that share counts are exploding, up 15% YoY. The stock still trades at about 23.5x '18 adjusted revenue estimates. As some shareholders hate, my  previous articles  on  Square  ( SQ ) pointed out the substantial risks in owning the mobile payment provider with limited profits at stretched valuation multiples. Following the release of  Q3 results , some more cracks are starting to form in the runaway growth story where my  investment thesis  already identified negative signals.  Read the full article on Seeking Alpha.

Square falls after moving further into risky loans. The departure of the CFO is another big risk for the stock. The long-term margin picture is mostly misunderstood by investors leading to the insane valuation when the stock reached $100. Square is still too expensive at $70 with these negative signals. In a predictable move, an overpriced stock like   Square   ( SQ ) quickly surged to $100 and just as quickly gave up the gains of the last few weeks. The mobile-payments company has quickly expanded into new areas and the market rapidly accepted them as easy money. Some likely doubts are emerging over a further expansion into the loan business, questioning if Square is running out of opportunities for customer expansion in more strategic areas. Read the full article on Seeking Alpha.  Disclosure: No position mentioned. Please review the disclaimer page for more details.   

Square cooled off following another run towards $50 due to the Bitcoin craze. The company is unlikely to attract large Bitcoin trading volumes as other services already corner the market. The valuation remains stretched as revenues aren't even set to top $1 billion for 2017. Square  ( SQ ) was trading back towards the all-time highs near $50 due to more excitement around Bitcoin before the market collapse. The stock valuation remains aggressive considering the limited utilization of the Cash App and the crashing value of cryptocurrencies. Square has now failed on two runs at $50. Read the full article on Seeking Alpha.  Disclosure: No position mentioned. Please review the disclaimer page for more details. 

Square has sold off 10% this week after an analyst price target cut. Investors face the upcoming volatility of the first earnings report of the public company. The valuation doesn't warrant owning Square with the headline risk. One of the biggest risks investing in an IPO is the initial earnings report. For a new public company, investors have no reference as to how corporate executives guide, be it conservatively or by over-inflating growth expectations to attract investors. Not to mention, the confusing aspect of accurately reflecting the new share count in expectations and the general impact of more public awareness about the business, offset by an executive team distracted by the IPO process. The end result is a messy initial quarterly report. Read the full article on Seeking Alpha.  Disclosure: No positions mentioned. Please review the disclaimer position for more details. 

PayPal is making strides to improve leverage after the split from eBay. Apple Pay, along with other payment options, are viable threats that are likely to cause volatility in the stock. The stock trades at an attractive valuation compared to the potential for digital payment growth that includes emergent mobile and P2P. The interesting part of the PayPal (NASDAQ: PYPL ) story is the digital payments provider has a business similar in size to MasterCard (NYSE: MA ). The payments network provider is generally seen as a bigger company due to the market valuation of nearly $110 billion, but both companies are on pace to soon pass an annual revenue run rate of $10 billion. Read the full article on Seeking Alpha. Disclosure: No positions mentioned. Please review the disclaimer page for more details. 

Google recently announced Android Pay as a launch partner with a new tokenization security service from Visa. The Visa plan includes blocking transaction fees on mobile payments for technology companies like Google. Google is positioned to benefit long term via other arrangements including marketing fees from credit card issuers and loyalty programs with consumers. Making money off any service is always a nice outcome, but sometimes the intent of services is to maintain customer loyalty or attract new customers. In the case of mobile payments, the vision heading into the end of May was that new payment providers would collect small fees that might eventually add up to billions. The news of the day suggests that the apple cart might have been turned over by the payment processors of Visa (NYSE: V ) and MasterCard (NYSE: MA ). Read the full article on Seeking Alpha. Disclosure: Long AAPL. Please review the disclaimer page for more details....

Summary IBM is reportedly working on a digital cash technology to work with global currencies. Such a digital payments network could have major repercussions for the high margins of Visa and MasterCard. The technology concept has an interesting twist considering the partnership IBM is forging with Apple and the ability to connect this network with Apple Pay. Last week,  Reuters broke news  that IBM (NYSE: IBM ) was working on adopting bitcoin technology to potentially develop a form of digital cash for a payments system. The details are sketchy at this point, but the news should give pause to a few high-priced stocks in the payments processing sector. Read the full article on Seeking Alpha.  Disclosure: Long IBM. Please review the disclaimer page for more details. 

Most consumers in the U.S. don't even think twice about using a credit card or having access to a bank account, but the banking sector in emerging markets is not available to all consumers, or even trusted in places such as Russia. Two stocks capitalizing on this offer investors the opportunity to invest in the potential growth in money services in countries such as India, Mexico, and Russia. Read the full article here . Disclosure: No positions mentioned. Please review the disclaimer page for more details. 

After reporting earnings on Wednesday night, eBay Inc. (EBAY) initially jumped nearly 5%, as investors were impressed with mobile growth and international expansion opportunities. The company is a global commerce platform and payments leader. Unlike Facebook (FB) or Google (GOOG) , eBay sees mobile as a game changer. The shift towards smartphones and tablet usage provides consumers with more access to utilize the services of eBay. Read the full article at Seeking Alpha. Disclosure: No positions. Please review the disclaimer page for more details.

Just about every day, a company releases news regarding the mobile payments area. Unfortunately for investors with only access to the public markets, the news tends to be from a private company and more importantly, the focus is usually on Square. For investors, a few opportunities exist via PayPal, a division of eBay Inc. (EBAY) and Intuit (INTU) . See original article from April regarding the different investment options. PayPal appears to have the best plan, but do investors get enough exposure from an investment in eBay with a market cap of $64B? Read the full article at Seeking Alpha. Disclosure: No positions mentioned. Please review the disclaimer page for more details. 

After recently writing articles (I, II) about mobile advertising, it seemed appropriate and interesting to check out the mobile payments industry next. With smartphones and tablets now widespread, the mobile payments industry appears ripe for major growth in the next 5 years. Normally being ahead of the curve on mobile adoption, I actually found myself very uninformed on mobile payments. Maybe the central part of the country is just behind on this technology adoption as I've yet to run across a small business owner using a mobile card reader. For now, the industry is very fragmented with numerous developments underway. Not to mention that concepts of whether mobile payments means the customer or the business uses the mobile device are mixed. The potential in this sector has attracted big boys including Intuit (INTU) , the PayPal division of Ebay (EBAY) , and Google (GOOG) to develop various solutions. Also, traditional payment processors MasterCard (MA) and Visa (V) are working ...