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Will Square's (SQ) Q1 Earnings Gain on Portfolio Strength?

Square, Inc. SQ is set to report first-quarter 2021 results on May 6.

The company’s portfolio strength is likely to have contributed well to the first-quarter performance.

Moreover, its friendly ecosystem, which enables sellers to combine software, hardware and payment services to accept payment from customers, is expected to have helped it in maintaining solid momentum across sellers.

All the factors are likely to have driven Square’s Gross Payment Volume (GPV) in the first quarter.

The Zacks Consensus Estimate for GPV for the first quarter is pegged at $29.5 billion, suggesting growth of 14.7% from the year-ago reported figure.

Click here to know how the company’s overall first-quarter performance is expected to have been.

Square, Inc. Revenue (TTM)

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

Square, Inc. revenue-ttm | Square, Inc. Quote

Portfolio Strength: Key Catalyst

Square’s portfolio strength is anticipated to get reflected in the first-quarter results.

In the to-be-reported quarter, the company unveiled a POS system called Square for Retail, which is expected to have delivered an enhanced experience to retailers on its platform.

Further, in the first quarter, Square rolled out an all-in-one specialized POS - Square for Restaurants in Canada. The move is likely to have aided the company’s momentum across restaurant operators in Canada in the quarter under review.

Apart from the latest introductions, Square’s other product lines such as Square Invoices, Square Terminal, Instant Deposits, Cash Card, Square Register, Square Reader, Square Stand and API platforms are expected to have benefited thefirst-quarter revenues.

Additionally, the growing adoption of Cash App in the bitcoin space is likely to have aided growth in Square’s bitcoin revenues, which, in turn, is expected to have continued to drive top-line growth in the to-be-reported quarter.

Also, product integrations are anticipated o have benefited Square’s performance in the quarter to be reported.

The impacts of all the above-mentioned products are expected to get reflected in the company’s first-quarter GPV.

In addition to this, its Square Financial Services started operating in the quarter under discussion. This is likely to have bolstered Square’s business loan processing volume in the first quarter.

Zacks Rank & Stocks to Consider

Currently, Square carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader technology sector worth consideration are Agilent Technologies A, Microchip MCHP and NVIDIA NVDA. All the stocks carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Long-term earnings growth rate of Agilent, Microchip and NVIDIA is pegged at 9%, 15.5% and 15.1%, respectively.

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NVIDIA Corporation (NVDA) : Free Stock Analysis Report

Microchip Technology Incorporated (MCHP) : Free Stock Analysis Report

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Square, Inc. (SQ) : Free Stock Analysis Report

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