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Square Drops 5%: Hiking Forecast Just Not Enough, Says Street

Shares of payments processing pioneer Square (SQ) are down $1.21, or almost 5%, at $25.26, even though the company yesterday afternoon reportedQ2 results that beat analysts’ expectations, forecast this quarter’s revenue higher as well, and raised its outlook for the full year’s results.

It seems all the goodness in the report may not have been enough for fairly high expectations, even though price targets are rising today at both bulls and bears.

Revenue in the three months ended in June rose more than 40%, year over year, to $240 million on an “adjusted” basis, yielding EPS of 7 cents, excluding some costs, topping consensus for $229 million and 5 cents per share.

Square’s total “net” revenue rose 26% to $552 million. Square Capital, the company’s small-business lending operation, saw its loan volume rise by 68%, the company said.

This quarter’s forecast of $238 million to $241 million in revenue, and 4 cents to 5 cents in EPS, compares to consensus for $237 million and 5 cents.

For the full year, the company sees revenue of $925 million to $935 million, and EPS of 21 cents to 23 cents. That is up from a prior...