Square's (SQ, $79.32) Q4 earnings exceed expectations, but Q1 guidance falls short of analysts' estimates
Square beat fourth quarter earnings estimates, but lagged behind analysts' expectations on first quarter guidance.
The merchant services aggregator & mobile payments company, co-founded by Twitter CEO Jack Dorsey, reported adjusted earnings of 14 cents per share for the fourth quarter, which exceeded analysts’ expectations of 13 cents a share (based on Refinitiv data). The earnings-per-share were also higher compared to the year-ago quarter, by 6 cents.
Adjusted revenue for the quarter surged +64% year-over-year to $464 million, compared to analysts’ estimates of $454 million (based on Refinitiv data). Sales from subscriptions and services in the quarter was $194 million, a +144% jump from a year earlier. Another major win for the company came in the form of its peer-to-peer Cash App’s monthly active customer count doubling from a year earlier to reach more than 15 million in December 2018.
However, the company’s outlook on the upcoming first quarter earnings fell short of analysts’ expectations. Square predicts earnings to range between 6 to 8 cents per share, while analysts’ expected 11 cents a share.
On the other hand, the company’s adjusted revenue guidance for the first-quarter is between $472 to $482 million – not too far off of analysts' estimates of $474 million.
Square shares dropped -3.9% Thursday morning.
Momentum Indicator for SQ turns negative, indicating new downward trend
SQ saw its Momentum Indicator move below the 0 level on January 07, 2025. This is an indication that the stock could be shifting in to a new downward move. Traders may want to consider selling the stock or exploring put options. Tickeron's A.I.dvisor looked at 74 similar instances where the indicator turned negative. In of the 74 cases, the stock moved further down in the following days. The odds of a decline are at .
Technical Analysis (Indicators)
Bearish Trend Analysis
SQ moved below its 50-day moving average on January 08, 2025 date and that indicates a change from an upward trend to a downward trend.
Following a 3-day decline, the stock is projected to fall further. Considering past instances where SQ declined for three days, the price rose further in of 62 cases within the following month. The odds of a continued downward trend are .
The Aroon Indicator for SQ entered a downward trend on January 08, 2025. This could indicate a strong downward move is ahead for the stock. Traders may want to consider selling the stock or buying put options.
Bullish Trend Analysis
The Stochastic Oscillator suggests the stock price trend may be in a reversal from a downward trend to an upward trend. of 57 cases where SQ's Stochastic Oscillator exited the oversold zone resulted in an increase in price. Tickeron's analysis proposes that the odds of a continued upward trend are .
Following a 3-day Advance, the price is estimated to grow further. Considering data from situations where SQ advanced for three days, in of 320 cases, the price rose further within the following month. The odds of a continued upward trend are .
SQ may jump back above the lower band and head toward the middle band. Traders may consider buying the stock or exploring call options.
The Tickeron Seasonality Score of (best 1 - 100 worst) indicates that the company is slightly undervalued in the industry. The Tickeron Seasonality score describes the variance of predictable price changes around the same period every calendar year. These changes can be tied to a specific month, quarter, holiday or vacation period, as well as a meteorological or growing season.
The Tickeron Price Growth Rating for this company is (best 1 - 100 worst), indicating steady price growth. SQ’s price grows at a higher rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron Valuation Rating of (best 1 - 100 worst) indicates that the company is fair valued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (2.682) is normal, around the industry mean (31.291). SQ's P/E Ratio (4073.000) is considerably higher than the industry average of (157.862). Projected Growth (PEG Ratio) (0.918) is also within normal values, averaging (2.763). Dividend Yield (0.000) settles around the average of (0.084) among similar stocks. P/S Ratio (2.282) is also within normal values, averaging (58.642).
The Tickeron SMR rating for this company is (best 1 - 100 worst), indicating weak sales and an unprofitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
The Tickeron Profit vs. Risk Rating rating for this company is (best 1 - 100 worst), indicating that the returns do not compensate for the risks. SQ’s unstable profits reported over time resulted in significant Drawdowns within these last five years. A stable profit reduces stock drawdown and volatility. The average Profit vs. Risk Rating rating for the industry is 87, placing this stock worse than average.
The Tickeron PE Growth Rating for this company is (best 1 - 100 worst), pointing to worse than average earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
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a provider of credit card reader solutions for mobile devices
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