Square Inc (NYSE: SQ) is off to a hot start to 2019, but one analyst says there’s plenty more upside potential for long-term investors.
KeyBanc analyst Josh Beck reiterated his Overweight rating and $100 price target for Square.
The new Square Seller Card can eventually hit $100 million in annual revenue on its own if it continues along its current growth path, according to Beck.
“The Square Card offers sellers a business spending card and the capability to easily categorize business and personal expenses with limits capped by sales,” Beck wrote in a note.
He said roughly 40 percent of small businesses don’t have a business card, and the new Square offering taps a large unmet market need. A large, underserved market of small businesses, an innovative product, and a clear path to distribution could ultimately result in much higher adoption rates and revenue growth than the market realizes, Beck says.
KeyBanc projects the Square Card could hit $100 billion in gross payment volume and $100 million in annual revenue by 2022. As a result, Beck raised his 2020 Subscription and Services-based revenue target from $1.390 billion to $1.431 billion, growth rate approaching 50 percent.
Overall, Beck says the long-term bullish thesis for Square will hinge on its ability to leverage its success in payments to grow into a larger role in global commerce. The Square Card for small businesses is just one of the many steps the company is taking to expand its reach.
Square traded around $74.91 per share Tuesday and are up more than 30 percent in 2019.
5 Stock Picks From The Top-Rated TipRanks Analyst
Photo courtesy of Square.
Latest Ratings for SQ
|Apr 2019||Bernstein||Initiates Coverage On||Market Perform|
|Mar 2019||Macquarie||Initiates Coverage On||Outperform|
View More Analyst Ratings for SQ
View the Latest Analyst Ratings
See more from Benzinga
© 2019 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.