SQUARE STOCK ANALYSIS - Buy Now or Wait? Intrinsic Value Calculation! | Summary and Q&A

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June 28, 2021
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The Intelligent Investor
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SQUARE STOCK ANALYSIS - Buy Now or Wait? Intrinsic Value Calculation!

TL;DR

Square Stock Analysis: Square is a top holding in ARK Innovation ETF and has a strong business model, with long-term growth prospects, two main growth catalysts, and some risks to consider.

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Key Insights

  • 🥺 Square operates as a leading payment service provider in the US, catering to both offline and online sellers.
  • 🔇 The company's two main growth catalysts are increasing gross payment volume (GPV) and the popularity of its Cash App.
  • *️⃣ Competition, Bitcoin price volatility, and the company's current lack of profitability are key risks to consider.

Transcript

hi everyone this is victor here welcome to the intelligent investor channel a patreon member asked me to take a look at squarestock to see if it's a great company for long term square is one of the top holdings in kathy wood's arc innovation etf in this video i'm going to analyze square stock for you personally i want to find out if square is a gre... Read More

Questions & Answers

Q: How does Square earn revenue from sellers?

Square earns revenue by charging a processing fee for transactions made through its POS systems and online retail stores. It also earns subscription revenues for additional services.

Q: What are Square's long-term growth catalysts?

Square's growth catalysts include increasing gross payment volume (GPV) from both sellers and Cash App users, and the popularity of its Cash App as a fintech platform.

Q: What are the risks associated with investing in Square?

Square faces competition from major players like PayPal, Shopify, and Apple Pay. Its investment in Bitcoin is subject to market volatility, and the company is not yet highly profitable.

Q: What is Square's intrinsic value per share?

Based on the analysis, Square's intrinsic value per share ranges from $139 to $282, with an estimated value of $200 in the normal case scenario.

Summary & Key Takeaways

  • Square is a leading payment service provider in the US, offering POS systems and payment services to sellers for both offline and online stores.

  • The company has two long-term growth catalysts: increasing gross payment volume (GPV) and the popularity of its Cash App, which offers more than just payment services.

  • Risks include increasing competition, the volatility of Bitcoin (which Square holds on its balance sheet), and the company's current lack of profitability.

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