Square (SQ, $86.17) Gambles With Additional Credit Risk
Although Square Capital has been extending credit to Square (SQ) customers since 2014, some analysts think their newest loan product is might be moving the business in an overly risky direction.
BTIG, the privately-held investment banking firm, has published a report suggesting that Square is becoming too dependent on their loan revenue, and estimates that their stock is currently overpriced by about 75%. The report caused the stock price to dip by 8.5% at the close of markets today.
Also implicated in the report was Paypal (PYPL), which, like Square, began as a payment processor and has since ventured into the business of lending. The BTIG report cited past examples of online lenders who failed to properly gauge the risks of lending, and suggested that the current subjects of inquiry are making similar mistakes.
Square’s new loan product, called Square Installments, is offering lower-than-average interest rates for business clients making significant purchases, which can be repaid over three, six, or twelve month installment periods. BTIG analyst Mark Palmer does not believe Square has built in sufficient compensation for themselves considering the risk they are taking, and he suggests that even attempting to pass the risk on in the credit markets will not adequately mitigate the risk, especially given the smaller margin they have available to split with potential credit investors.
More companies, like Intuit (INTU), Payanywhere, Clover, and Sumup have entered the small business payment processing space since Square got started, and the increasing popularity of micro-loans, as well as mobile banking, non-traditional investing, and other new financial applications, present companies like Square with many tantalizing opportunities for diversification. The question is, will they get it right?
XYZ's RSI Oscillator ascending out of oversold territory
The RSI Indicator for XYZ moved out of oversold territory on November 19, 2025. This could be a sign that the stock is shifting from a downward trend to an upward trend. Traders may want to buy the stock or call options. The A.I.dvisor looked at 36 similar instances when the indicator left oversold territory. In of the 36 cases the stock moved higher. This puts the odds of a move higher at .
Technical Analysis (Indicators)
Bullish Trend Analysis
The Momentum Indicator moved above the 0 level on November 28, 2025. You may want to consider a long position or call options on XYZ as a result. In of 85 past instances where the momentum indicator moved above 0, the stock continued to climb. The odds of a continued upward trend are .
The Moving Average Convergence Divergence (MACD) for XYZ just turned positive on November 26, 2025. Looking at past instances where XYZ's MACD turned positive, the stock continued to rise in of 50 cases over the following month. 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 XYZ advanced for three days, in of 317 cases, the price rose further within the following month. The odds of a continued upward trend are .
XYZ may jump back above the lower band and head toward the middle band. Traders may consider buying the stock or exploring call options.
Bearish Trend Analysis
The Stochastic Oscillator entered the overbought zone. Expect a price pull-back in the foreseeable future.
XYZ moved below its 50-day moving average on October 29, 2025 date and that indicates a change from an upward trend to a downward trend.
The 10-day moving average for XYZ crossed bearishly below the 50-day moving average on November 06, 2025. This indicates that the trend has shifted lower and could be considered a sell signal. In of 15 past instances when the 10-day crossed below the 50-day, the stock continued to move higher over the following month. The odds of a continued downward trend are .
Following a 3-day decline, the stock is projected to fall further. Considering past instances where XYZ 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 XYZ entered a downward trend on November 28, 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.
The Tickeron SMR rating for this company is (best 1 - 100 worst), indicating strong sales and a profitable 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 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 (1.803) is normal, around the industry mean (15.123). P/E Ratio (13.441) is within average values for comparable stocks, (160.657). Projected Growth (PEG Ratio) (1.333) is also within normal values, averaging (1.617). XYZ has a moderately low Dividend Yield (0.000) as compared to the industry average of (0.026). P/S Ratio (1.752) is also within normal values, averaging (70.182).
The Tickeron Price Growth Rating for this company is (best 1 - 100 worst), indicating fairly steady price growth. XYZ’s price grows at a lower rate over the last 12 months as compared to S&P 500 index constituents.
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.
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. XYZ’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 91, placing this stock worse than average.
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General Information
a provider of credit card reader solutions for mobile devices
Industry ComputerCommunications
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