SQ Stock Price: $250 Target By KeyBanc

By Amit Chowdhry ● November 18, 2020
  • Shares of Square Inc (NYSE: SQ) have received a target price increase from $215 to $250 by KeyBanc. These are the details.

Shares of Square Inc (NYSE: SQ) have received a target price increase from $215 to $250 by KeyBanc. KeyBanc analyst Josh Beck is also maintaining an “Overweight” rating on the shares.

Beck cited the increased value of the Cash App. In a note to investors, Beck said that the Cash app is driving a powerful consumer digital banking and commerce ecosystem with “transformative potential.”

“Rising adoption of products like Cash Card (supported by recent KBCM Consumer Survey work) and Direct Deposit translates into higher engagement (and thus retention/LTV) and ARPU potential, which could sustain hypergrowth beyond the core Digital Acceleration period that has materialized in 2020. Our base case assumes Cash App adjusted revenue (ex-BTC) grows at a ~73% CAGR through FY22, exiting at a ~$4.4B run-rate, primarily driven by Cash Card (assuming roughly one-third of MAUs adopt the card) and Instant Deposit revenue,” wrote Beck in the research note via StreetInsider. “We raise our Cash App bull/base/bear cases to $300/$200/$75 from $150/$90/$25 based on our updated ~200 row bottom-up revenue model based on send, spend, and invest buckets. We raise our 2021E with KBCM at $2,540M S&S revenue vs. the Street at $2,030M.”

On November 5, Square had reported its Q3 2020 earnings. The company beat analyst expectations on adjusted EPS and revenue.

Total net revenue was $3.03 billion, up 140% year-over-year — which was well above analyst expectations. The adjusted EPS was $0.34 — up more than double analyst predictions and representing year-over-year growth of 36%.

Square also reported higher than expected gross payment volume for the quarter as it processed $31.7 billion in Q3 — which represents a year-over-year increase of 12%.