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Square (SQ) Stock Set To Close at All-Time High

Square SQ stock climbed higher again on Wednesday and is set to close at a new all-time high, as investors seemingly can’t get enough of the mobile payment company in 2017.

Shares of Square hovered around 2% higher on Wednesday, and the company is now poised to close at over $27 per share for the first time ever. The up and coming mobile payment company also eclipsed its intraday high today, touching $27.68 per share.

The San Francisco-based company closed 2016 trading at $13.63 per share and hasn’t looked back since. Square is currently a Zacks Rank #3 (Hold) and scored an “A” for growth in our style score system.

Why Do Investors Keep Coming?

Beyond the mobile payment company’s fundamental and popular small business point of sale services, Square still has room for growth in an array of areas.

Square began to offer small business loans through Square Capital, which allows merchants the opportunity to pay loans back gradually through automatic payments via a portion of their point of sale transactions.

These loans could be particularly exciting for many small businesses because it removes the hassle of going through a bank. Square simply monitors a merchant and then lets them know through their online business portal if they are eligible for a loan.

Twitter TWTR CEO Jack Dorsey’s other company also invested in the food-ordering sector. Square now owns two food industry companies, OrderAhead and Caviar.

On top of that, Square has grown to this point, without a large international presence. The mobile payment company officially entered just its fifth country, the U.K., in late March.

Could Today Mean Something More For Square?

Square’s name came up recently as a potential buyout candidate for a much larger and more established company that operates in the same sector: PayPal PYPL.

Loop Capital analyst Joseph Vafi suggested in an early July note that PayPal should consider buying Square. "PayPal's strategic objectives over the next several years should be to maximize Venmo monetization opportunities, extend PayPal's reach in brick-and-mortar retailers, and stem transaction margin deterioration," Loop Capital analyst Joseph Vafi said.

"The acquisition of Square helps check the boxes. Such an acquisition also fits with PayPal's vision of transforming itself into a true, two-sided network. Timing-wise, such a deal makes more sense now that Square is pro-forma profitable… With millions of active merchants, Square's customer base makes for a tantalizing monetization opportunity for Venmo."

The note lays out what seems to be a reasonable case for PayPal to acquire Square. The idea of pairing Square’s merchant-facing, small and medium size business services with PayPal’s millennial-driven, person-to-person mobile payment platform could prove to be a winning combination for both sides.

PayPal is set to announce its second-quarter financials after the closing bell today. Square is ready to report its Q2 earnings a week from today, on August 2.

Depending on how the two companies’ second-quarter earnings and forward-looking statements turn out, perhaps a deal is also in their futures.

The Hottest Tech Mega-Trend of All                

Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce “the world's first trillionaries,” but that should still leave plenty of money for regular investors who make the right trades early.

See Zacks' 3 Best Stocks to Play This Trend >>     


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