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 MACD Histogram just turned positive
The Moving Average Convergence Divergence (MACD) for XYZ turned positive on June 30, 2025. Looking at past instances where XYZ's MACD turned positive, the stock continued to rise in of 47 cases over the following month. The odds of a continued upward trend are .
Technical Analysis (Indicators)
Bullish Trend Analysis
The Momentum Indicator moved above the 0 level on June 25, 2025. You may want to consider a long position or call options on XYZ as a result. In of 78 past instances where the momentum indicator moved above 0, the stock continued to climb. 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 315 cases, the price rose further within the following month. The odds of a continued upward trend are .
The Aroon Indicator entered an Uptrend today. In of 208 cases where XYZ Aroon's Indicator entered an Uptrend, the price rose further within the following month. The odds of a continued Uptrend are .
Bearish Trend Analysis
The RSI Indicator demonstrates that the ticker has stayed in the overbought zone for 3 days. The longer the ticker stays in the overbought zone, the sooner a price pull-back is expected.
The Stochastic Oscillator demonstrated that the ticker has stayed in the overbought zone for 6 days. The longer the ticker stays in the overbought zone, the sooner a price pull-back is expected.
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 .
XYZ broke above its upper Bollinger Band on June 30, 2025. This could be a sign that the stock is set to drop as the stock moves back below the upper band and toward the middle band. You may want to consider selling the stock or exploring put options.
The Tickeron Price Growth Rating for this company is (best 1 - 100 worst), indicating steady price growth. XYZ’s price grows at a higher rate over the last 12 months as compared to S&P 500 index constituents.
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 significantly overvalued 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 (31.479). XYZ's P/E Ratio (4073.000) is considerably higher than the industry average of (164.144). Projected Growth (PEG Ratio) (0.918) is also within normal values, averaging (2.732). Dividend Yield (0.000) settles around the average of (0.030) among similar stocks. P/S Ratio (2.282) is also within normal values, averaging (62.041).
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 88, placing this stock worse than average.
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General Information
a provider of credit card reader solutions for mobile devices
Industry PackagedSoftware
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