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Expanding Product Portfolio to Aid Square's (SQ) Q1 Earnings

Zacks Equity Research

Square, Inc. SQ is set to report first-quarter 2019 results on May 1.

The company’s friendly ecosystem that enables sellers to combine software, hardware and payments services in order to accept payment from the customers through its wide range of online payment products remains crucial and will aid its seller base in the to-be-reported quarter.

Moreover, Square’s continued focus toward strengthening ecosystem on the back of its robust portfolio remains a key catalyst.

All these factors are likely to drive the Gross Payment Volume (GPV) in the quarter under review.

GPV in the last reported quarter increased almost 28% year over year and 1.8% on a sequential basis to $22.9 billion, driven by growth in larger sellers. Moreover, GPV from larger sellers contributed 51% to total GPV and surged 39% year over year.

Click here to know how the company’s overall fourth-quarter performance is likely to be.

Square, Inc. Revenue (TTM)


Square, Inc. Revenue (TTM) | Square, Inc. Quote

Portfolio Strength: Key Growth Driver

Square’s strengthening product offerings are expected to continue to support it in retaining the existing sellers and attracting new sellers to its platform. Moreover, its strategic acquisitions and product integration remain tailwinds.

During the first quarter, the company unveiled a free debit card, Square Card, for small business owners (SMB). Square’s recent move is aimed at helping businesses in efficient management of their cashflow by providing immediate access to funds generated from sales.

Further, Square made its two omni-channel products, Square Online Store and Square for Retail, available. This will help the company in strengthening its omni-channel offerings and expanding seller base.

Additionally, Square launched its in-app payments software development kit (SDK), which will enable developers to process payments with Square through their own mobile apps.

Furthermore, the company teamed up with Levy Restaurants and the Washington Nationals, which is likely to boost the adoption rate of Caviar and Square Terminal. Both products will enable fans to place their food and drinks order and pay for them seamlessly.

All these product introductions are likely to boost GPV of the company in the to-be-reported quarter.

Moreover, Square is anticipated to witness strong performance of Square Terminal, Instant Deposits, Cash Card, Square Register, Caviar and Cash App, which is likely to drive its top-line growth in the first quarter.

Zacks Rank and Stocks to Consider

Square currently carries a Zacks Rank #3 (Hold).

A few better-ranked stocks in the broader technology sector are Avid Technology, Inc. AVID, GoDaddy Inc. GDDY and Mettler-Toledo International, Inc. MTD. While Avid Technology sports a Zacks Rank #1 (Strong Buy), GoDaddy and Mettler-Toledo carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Long-term earnings growth for Avid Technology, GoDaddy and Mettler-Toledo is projected at 10%, 17% and 12.57%, respectively.

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