|Bid||64.70 x 1000|
|Ask||64.75 x 3100|
|Day's Range||63.76 - 65.04|
|52 Week Range||49.82 - 101.15|
|Beta (3Y Monthly)||3.00|
|PE Ratio (TTM)||N/A|
|Earnings Date||Jul 30, 2019 - Aug 5, 2019|
|Forward Dividend & Yield||N/A (N/A)|
|1y Target Est||82.97|
It seems like nothing can stop PayPal (NASDAQ:PYPL). After a brief slowdown during the bear market in late 2018, PayPal stock had returned to its late-summer highs by January.Source: Shutterstock The move higher continued, and now it trades at record highs. Given the growth in the payments industry, PYPL will continue its rise long term. However, the question is not whether to buy PYPL stock, but if investors should choose it over its closest peers.PayPal stock continues to register impressive growth, even as it seeks to address the competitive threat posed by Square (NYSE:SQ). Fueling this is a rising cashless society and a move toward more ecommerce. This bolsters not only PayPal stock and that of Square, but also payment processors such as Visa (NYSE:V) and MasterCard (NYSE:MA).InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 6 Stocks to Buy for This Decade's Massive Megatrend This increase continues at a steady but significant pace. According to eMarketer, retail ecommerce sales will rise from $3.453 trillion this year to $4.878 trillion by 2021.PayPal may have also become a force in the banking business itself. Its digital wallet, Venmo, has risen to over 40 million accounts as of the first quarter. Venmo also registered a 73% increase on payments on its platform. This compares well to Bank of America (NYSE:BAC) with 37 million digital accounts and Wells Fargo (NYSE:WFC) who with 29.8 million digital users. PYPL lags only JPMorgan Chase (NYSE:JPM), which claims 51 million active accounts. A Closer Look at PayPal StockGiven this increase, I see ample room for growth for all major players involved. The predicted profit increases in PayPal stock represents the growth well. Analysts expect earnings increases to come in at 23.1% this year and 17.8% next year.This has also brought somewhat higher price-to-earnings (PE) ratios across the industry. PayPal's forward PE now stands at 32.1. While not cheap, that appears inexpensive compared to SQ stock and its 59.3 forward PE ratio. Moreover, the multiples of Visa and Mastercard are somewhat lower, but not by much.But here's the thing.In this sector, multiples tend to rise with rates of profit growth. Square supports a significantly higher PE ratio. However, Wall Street believe SQ's profits will rise by 59.6% this year and 49.3% the next.In 2020, Square's profits will grow at about 2.5 times PayPal's earnings this year. Next year, Square will roughly triple PayPal's growth rate. Given this differential, I see a case for buying SQ when its forward multiple comes in a less than double PayPal's PE ratio.Conversely, investors can pay about 26.4 times forward earnings for Visa. Following what looks like an industry trend, that will buy investors lower but still impressive growth rates. Analysts expect Visa will see a 16.5% earnings increase this year and a 15.6% rate in 2020.Moreover, PYPL has risen more than 46% from its December low. This comes in substantially higher than the 33%-plus growth in SQ over the same period. Given this rapid rise, I cannot rule out a short-term correction. What should investors do?PayPal stock will remain a growth equity for years to come, but it may not outperform a key peer. PYPL trades near record highs. Its massive profit increase justifies its PE ratio in the low 30s. However, one cannot ignore Square stock, which offers almost triple the growth at less than double the valuation.Again, I do not think this negates the bull thesis in PayPal stock. I also believe payment stocks will generally continue to rise long-term. In my view, it comes down to risk tolerance. Investors more comfortable with lower multiples should consider PayPal or maybe Visa. However, for those who will willingly pay a higher PE for more elevated growth levels, Square stock might make a better choice.As of this writing, Will Healy did not hold a position in any of the aforementioned stocks. You can follow Will on Twitter at @HealyWriting. More From InvestorPlace * 4 Top American Penny Pot Stocks (Buy Before June 21) * 6 Stocks to Buy for This Decade's Massive Megatrend * The 7 Best Stocks to Buy From the IPO ETF * 7 Athletic Apparel Stocks With Marathon Pace Compare Brokers The post PayPal Stock Will Move Higher, but There Are Way Better Choices appeared first on InvestorPlace.
Square (NYSE:SQ) has recently given back a lot of its gains from last year. After briefly topping $100 per square, SQ stock has sharply reversed. SQ stock now trades for just $65, and has failed to recover, even as the stock market has roared back from its December lows.Source: Chris Harrison via Flickr (Modified)It's not hard to see why SQ stock has underwhelmed so far in 2019. The valuation of Square stock reached outrageous levels when the shares hit $100. At that point, the market was pricing in both huge growth by SQ and a sharp upturn in its profitability. Unfortunately, Square's first-quarter results, unveiled on May 1, did little to support either tenet of the bulls' thesis. * 5 Safe Stocks to Buy This Summer Earnings Were Fine But Not EnoughSquare's Q1 results were a mixed bag. If expectations for the company had been lower, investors probably would have been fine with the results. But given the high price of SQ stock, blowout results were needed to sustain its upward trend.InvestorPlace - Stock Market News, Stock Advice & Trading TipsSQ reported non-GAAP earnings per share of 11 cents, which topped analysts' consensus outlook of 8 cents. On a GAAP basis, the company continues to lose money. On the revenue side, it topped consensus expectations, but not by much. Its $489 million top line only modestly exceeded analysts' consensus outlook of $480 million.Some bulls pointed to the company's escalating year=over-year revenue growth rate as a positive point. But, excluding the impact of Square's recent acquisitions, its growth rate has been declining in recent quarters. Furthermore, analysts expect SQ's growth to fall off sharply, from something in the high fifties now to closer to 40% next year. Obviously, 40% annual revenue growth is still great, but when the company is still only, at most, marginally profitable, the owners of Square stock will want its CEO, Jack Dorsey, to produce better results. SQ Stock Still Has a High ValuationEven after dropping 35% from its high of last year, SQ stock is really expensive compared with its peers. Square stock is trading around 7.5 times its 2018 sales and nearly 60 times analysts' average 2019 earnings estimate.Those numbers are much higher than the valuations of other payment tech companies. Maybe the current valuation of Square stock would make sense if SQ had recently carried out its IPO and was still early in its maturation process. But Square has been around long enough to start backing up its valuation. PayPal (NASDAQ:PYPL) stock is trading closer to six times its sales and 30 times its earnings.Both WorldPay (NYSE:WP) and Global Payments (NYSE:GPN) look even cheaper than PayPal on the basis of these metrics, to say nothing of Square. The owners of Square stock have to ask themselves what makes SQ stand out from its competitors. Square dominates its niche of the smallest of businesses, but has struggled to gain traction with larger companies. As businesses' volumes rise, Square's fees tend to become less competitive. Jack Dorsey has to find a way to change that situationBut SQ has some other irons in the fire. Its Cash App, for example, has had a strong run, though it appears that PayPal's Venmo is catching up. Some of Cash App's features, such as Bitcoin trading, could cause some users' interest in SQ to rise, but that probably won't be enough to drive SQ stock back to its old highs. Jack Dorsey needs something bigger, which brings us to… Square's Quest for a Banking LicenseThe one thing that could really turn things around for SQ stock in a hurry would be a banking license. Square originally filed paperwork for a license in September 2017. It intended to become a Utah-based bank that would focus on small business.However, after regulators expressed concerns about its application, SQ withdrew it. However, SQ refiled its application late last year. Why is Square so intent on obtaining a banking license? In theory, an FDIC-insured Square Bank would give SQ a large amount of disruptive power. Right now, SQ has to operate using its customers' banks, which adds fees and friction. Square Bank would allow its small business customers to open their own accounts directly with Square, cutting out the middleman.Obtaining a banking license would help Square make more loans to its small-business customers. SQ arguably has better data than traditional banks, as it can see a huge portion of its customers' transaction data in real time. Additionally, SQ could obtain payments on its loans directly from the recipients' transactions, rather than waiting for the businesses to choose to make payments.In theory, SQ stock should surge after it receives a banking license. But the license may never be granted. For one, the FDIC tends to be fairly cautious about granting banking licenses to more aggressive firms. I've been skeptical about whether Square's small-business lending will earn high enough returns to offset the large credit risk of lending to tiny businesses. Its business model looks good during boom economic times but what happens during a recession? Perhaps regulators are wondering the same thing. Jack Dorsey will have to convince regulators that SQ's business model will remain sound during economic downturns. The Verdict on SQ StockIf Square gets its banking license soon, all bets are off. But for now, SQ stock is likely to continue to struggle compared with other tech stocks.Its last earnings report was underwhelming. With its valuation still far above that of industry rivals, Jack Dorsey needs to put up dazzling results to get its stock price moving again. Another earnings report that just barely tops expectations, let alone a miss, could send SQ stock lower in a hurry.At the time of this writing, Ian Bezek held no positions in any of the aforementioned securities. You can reach him on Twitter at @irbezek. More From InvestorPlace * 4 Top American Penny Pot Stocks (Buy Before June 21) * 5 Safe Stocks to Buy This Summer * The 5 Best Telecom Stocks to Buy Now * 6 Innovative Stocks With Big Long-Term Growth Potential Compare Brokers The post Square Stock Is No Bargain Yet appeared first on InvestorPlace.
Business for the on-demand delivery service has grown by more than 60 percent in the three months since its last funding round.
There are two critical elements to identifying long-term winners in the stock market. First, find a secular growth industry, supported by secular growth trends with a massive addressable market. Second, find the top company or companies in that industry. Do those two things, and you've found yourself a long term-winning stock which you can buy and hold for the long haul.What exactly makes a company in a secular growth industry a "top" company? There are a lot of factors. But, arguably the most important is innovation. Simply, a company that innovates consistently in a secular growth industry is often one that is expanding its share in that industry. Companies that expand share in secular growth industries tend to consistently produce robust revenue and profit growth.And, ultimately, robust revenue and profit growth are what make stocks go higher. Thus, if you're looking for a long-term winning stock, look for an innovative company expanding share in a secular growth industry.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 6 Stocks to Buy for This Decade's Massive Megatrend Which stocks fit that description? Let's take a closer at 6 innovative stocks with big long-term growth potential. Shopify (SHOP)Source: Shopify via FlickrThe Industry: Direct-decentralized retailThe entire retail world is pivoting towards a direct-decentralized model. Broadly, the direct part is the result of the internet connecting brands/retailers directly to their customers, thereby removing the need for a middleman. The decentralized part, meanwhile, is the result of the internet democratizing the retail process so that anyone can sell anything to anyone through the internet.This model yields optimal outcomes for sellers (millions of new sellers can now compete with traditional sellers) and buyers (there's more supply, which inherently means lower prices and higher convenience). Thus, direct decentralized retail will continue to grow in popularity over the next several years.The Innovator: Shopify (NYSE:SHOP)The pioneer and leader in this market is Shopify. The company provides commerce solutions which enable and empower the millions of new sellers which comprise this direct decentralized retail model. Over the past several years, Shopify has continued to iterate, improve, and expand its suite of offerings.The net result is that the company has dramatically grown its market share in the commerce world, and continues to do so today. So long as this remains true, SHOP stock will remain on a long term winning trajectory. The Trade Desk (TTD)Source: Shutterstock Industry: Programmatic advertisingThe advertising world is increasingly shifting towards an automated ad transaction model. Broadly, this means that ad spend is increasingly being done using data-driven algorithms -- not humans and guess-and-check work -- so the ad-spend process is becoming smarter, more dynamic and more efficient than ever before. This process is called programmatic advertising. Given its multi-faceted benefits, it is the future of advertising.The Innovator: The Trade Desk (NASDAQ:TTD)The most exciting company in this space is The Trade Desk, a programmatic advertising company which has leveraged a differentiated product offering, aggressive product innovation, and platform neutrality to turn into the growth darling in the programmatic advertising space. Over the past several years, The Trade Desk has significantly and rapidly expanded its market share in the programmatic advertising market. * The 7 Best Stocks to Buy From the IPO ETF This trend will persist. As it does, The Trade Desk will continue to report great numbers, and those numbers will propel TTD stock meaningfully higher. Square (SQ)Source: Chris Harrison via Flickr (Modified)Industry: Digital paymentsAcross the global commerce space, there has been and continues to be a huge secular pivot from cash payments to non-cash payments, as consumers have increasingly adopted digital and card payment methods which are significantly more convenient. But, cash remains a big part of the global economy. Thus, there's still a ton of room for non-card payment methods to gain share over the next several years. As they do, companies which facilitate these types of payments will benefit from robust growth.The Innovator: Square (NYSE:SQ)The most innovative company in this space is Square. The payments processor has made a killing facilitating physical, non-cash payments for small to medium sized retailers. But, Square didn't stop there. Instead, they've subsequently expanded their physical offerings to be more attractive to bigger sellers, jumped into the digital payments space, created a suite of Services business, tested the waters in the banking world, and even built a food delivery platform.All in all, then, Square is innovating everywhere, and this rapid innovation has produced rapid market share expansion. So long as this continues, SQ stock will trend higher in the long run. Axon (AAXN)Source: Axon Industry: Law-enforcement technologyThe technology world is moving fast. But, the law-enforcement world has largely been left behind the technology curve. Until recently. Over the past several years, antiquated law enforcement agencies have undergone much-needed technology makeovers, which includes adopting things like smart cameras, smart weapons, cloud solutions and data-driven analytics services.These technology upgrades are happening with greater frequency and pace across the world. Soon enough, every law enforcement agency will be equipped with the latest and greatest tech.The Innovator: Axon (NASDAQ:AAXN)The pioneer, largest player and most innovative company in this space is Axon. Axon started out just selling Tasers to law enforcement agencies. Then, they pivoted into body cameras and dash cameras. Realizing the potential in the law enforcement tech world extended beyond hardware, they then pivoted into servicing the law enforcement world with cloud-hosted solutions to replace archaic on-premise solutions. * 3 Small Caps That Could Be the Next Amazon Stock Net net, the company has dramatically expanded its suite of law enforcement tech over the past several years, and in so doing, has dramatically gained law enforcement wallet share. This trend is still in its early stages, as Axon has dominated the domestic market but is only scratching the surface of its international potential. As the international growth narrative plays out, Axon's profits will run higher, and so will AAXN stock. Chegg (CHGG)Source: Rob Wall via Flickr (Modified)Industry: Digital educationThe internet has changed and continues to change many industries. One of those industries is the education world. In the education world, students are increasingly turning towards the internet for academic assistance. This includes on-demand tutoring services, online citation makers, online textbook answers and much, much more. As students turn in greater and greater frequency to the internet for academic assistance, there remains tremendous growth potential for a connected learning platform to capture and monetize all this demand.The Innovator: Chegg (NASDAQ:CHGG)The unprecedented leader and pioneer in the digital education space is Chegg. Broadly speaking, there wasn't an at-scale, digital connected learning platform in the market until Chegg came around. And, Chegg didn't start with connected learning. They started with textbook rentals and have increasingly pivoted into the digital education market over the past several years.Chegg continues to expand its connected learning platform today, so that students of all disciplines have a reason to turn towards the platform. Assuming this value and use-case expansion continues, then Chegg is on track to tap into all 36 million high school and college students in America in the future. Right now, they only have about 10% of that, so the long-term growth runway here is quite promising. Canopy Growth (CGC)Source: Shutterstock Industry: CannabisCannabis is now fully legal throughout Canada. This is just beginning. Given the overwhelming volume of research which suggests that cannabis isn't all that bad for you and the equally overwhelming volume of cannabis demand, global cannabis legalization isn't a matter of if. It's a matter of when.When it does happen, the global cannabis industry will be quite big. The trends are crystal clear. Over the past two decades, cannabis consumption among U.S. high school students has steadily increased, while tobacco and alcohol consumption have steadily decreased. Today, cannabis consumption rates are nearly equal to alcohol consumption rates among high school seniors.As such, once fully legal across the globe, the cannabis industry could measure as large as the alcoholic beverage industry, which is far in excess of $500 billion.The Innovator: Canopy Growth (NYSE:CGC)The leader and aggressive innovator in the cannabis space is Canopy Growth. Canopy is the biggest player in the legal Canadian cannabis market, with the largest growing footprint and the biggest volume and sales base by a wide margin. Further, Canopy is equipped with $4 billion on the balance sheet as the result of a big investment from alcoholic beverage giant Constellation Brands (NYSE:STZ).Canopy has been very aggressive with that $4 billion, including prepping a big launch into the U.S. cannabis market with the proposed acquisition of U.S. cannabis company Acreage. These aggressive investments will pay off in the long run. Canopy is giving itself robust and high quality exposure to every niche of the global cannabis market. As all those niches scale over the next several years, Canopy will scale, too. * 7 Marijuana Stocks to Play the CBD Trend Big picture, the company is positioned to one day be the leader in a $500 billion industry. If that happens, CGC stock will one day be worth a lot more than $16 billion.As of this writing, Luke Lango was long SHOP, TTD, SQ, AAXN, CHGG, and CGC. More From InvestorPlace * 4 Top American Penny Pot Stocks (Buy Before June 21) * 6 Stocks to Buy for This Decade's Massive Megatrend * The 7 Best Stocks to Buy From the IPO ETF * 7 Athletic Apparel Stocks With Marathon Pace Compare Brokers The post 6 Innovative Stocks With Big Long-Term Growth Potential appeared first on InvestorPlace.
If there's one investment I regret missing out on, it's retail-technology outfit Square (NYSE:SQ). During the summer of 2016, SQ stock dropped to single digits. Late last year, the company completed a dramatic turnaround, with shares briefly touching $100. But even at its current price of just under $66, Square has done well for its long-time stakeholders.Source: Via SquarePartially, I blame the cryptocurrency surge for taking my eyes off the ball. The concept surrounding Square stock is so simple yet so incredibly ingenious. Take a small card-swiper, make it compatible with popular smartphones, and presto! You have a platform that enables small-business owners to compete with the alpha dogs of their industries.I've seen firsthand how this diminutive square device has transformed my local business community. In the Amazon (NASDAQ:AMZN) era where anything physical is subject to disruption, Square brought disruption for -- and in favor of -- the little guy. This breathed new life in the broader brick-and-mortar business model, fueling SQ stock gains.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 7 Stocks to Buy for Over 20% Upside Potential That said, the second quarter of this year is not turning out favorably for the company's equity. Since the beginning of April, Square stock is down nearly 14%.Most of that ugliness comes down to Square's disappointing second-quarter earnings report. While the tech firm beat the consensus print for both earnings per share and revenue, management shared profitability and sales guidance that fell short of analysts' estimates. As a result, SQ stock slipped and still looks pensive.The other problem is competition. Major players, such as Mastercard (NYSE:MA) and Visa (NYSE:V), have seen their revenues disrupted by third party payment processors like Square, Stripe and other fintech entrants. They have the resources, though, to return the favor, casting a cloud on Square stock. SQ Stock Sitting on a Japanese GoldmineNow, I'm not going to guess the nearer-term price swings. Clearly, the bullishness in SQ stock got a little out of hand last year. The latest earnings report brought the speculative fever back down to earth. Ultimately, I think this is a good thing for patient investors seeking an ideal time to jump aboard.That's because Square stock has viable opportunities both here and abroad. In the U.S., small businesses are the engine of the economy. They've also contributed the most nominally to the recent employment surge. Arming them with the tools to succeed is always a net positive.But one of the international markets I'm most excited for regarding SQ stock is Japan. Historically, Japan was a cash-based society, and even to this day, this dynamic remains. It's one of the country's strange contradictions: a tech leader that still transacts in paper.In order to juice-up its economy, the Japanese government is desperately urging its citizenry to adopt card and digital payments. Initiatives are working, albeit very slowly. In fact, taxi drivers in Japan have only recently started to accept credit cards, but most still prefer cash.Since Square stock is an indirect investment into the cashless trend, Japan initially appears a headwind. But here's the thing: Japan is getting older rapidly, so old habits are likely to fade. Furthermore, the Japanese are very well-traveled, and are eager to adopt certain western conveniences.As the next generation of Japanese entrepreneurs and small-business owners step in, they'll serve the next generation of consumers. Very likely, these younger customers and clients will prefer cashless payments. With Square already levering a relatively significant presence in Japan, it's in prime position to profit.That alone could send SQ stock soaring. Buy the Discount in Square StockAdmittedly, my thesis will take some time to filter through to the SQ stock price. But it's also an underreported concept that deserves more attention.Although we typically consider Japan a tech giant, the country is also happy living a contradiction. As more or less a conservative society, change might be slow. Eventually, though, I think it will occur. When it does, it will hit like a tsunami.For one thing, Japan is the world's third-largest economy, and it's not going to give up that slot easily. Of course, it has a penchant for all things high tech. Finally, the Japanese have adopted cryptocurrency at a much quicker rate than many other nations, suggesting a willingness to try new things.When Japan does go cashless, it will catch many companies by surprise. Not Square, which knows full well what's up. Therefore, you should consider getting ahead of this hidden trend, not behind it.As of this writing, Josh Enomoto did not hold a position in any of the aforementioned securities. More From InvestorPlace * 4 Top American Penny Pot Stocks (Buy Before June 21) * 7 Stocks to Buy for Over 20% Upside Potential * 5 Large-Cap Stocks Holding Steady Amid Trade War Concerns * 7 ETFs for Healthy Healthcare REITs Compare Brokers The post Tokyo Tailwind Could Spark Next Leg Up For Square Stock appeared first on InvestorPlace.
Now it's time to check out three tech stocks that came through our screen today that growth investors might want to consider buying right now.
Square examined its transaction data and polled its small businesses to see what they thought their customers' views on cash and card are.
Payment processing service Square Inc (NYSE: SQ) confirmed Wednesday that it is in the midst of a pilot program that allows select hemp-derived CBD products on its platform. The same statement was provided to other outlets, including to Marijuana Moment's Tom Angell, who first broke the news on Forbes. If the beta program eventually grows, it could serve as an access point for CBD companies seeking a financial service to use in the United States.
Earlier this month, I wrote a bullish article on Uber (NYSE:UBER) stock. My thesis was simple. The Uber IPO was a dud because of short-term timing issues.Source: Shutterstock Those timing issues won't hang around forever. Once they pass - and they will pass quickly - investors will shift their focus to the long-term growth outlook of Uber. That long-term growth outlook is quite robust. As a result, once the Street begins focusing on the company's fundamentals, Uber stock will become a winner. * 7 Safe Stocks to Buy for Anxious Investors That has already happened. Uber stock dropped 20% below the Uber IPO price just a few days after the IPO. But, over the past ten days, Uber stock has rallied back to levels not far below the Uber IPO price.InvestorPlace - Stock Market News, Stock Advice & Trading TipsUber stock has rallied as timing issues faded and investors became more interested in growth stocks again.For several reasons, the strength of Uber stock will continue. Those reasons are outlined below. The Growth Trade Is BackFrom a macro perspective, growth stocks are back in favor, and that will help Uber stock price head higher.The Uber IPO occurred at a bad time. Investors were shying away from growth stocks amid rising international trade tensions. Their concern was that new tariffs, if in place for a long time, would simultaneously slow U.S. economic growth and raise prices and inflation. Higher prices would force the Fed to come off the sidelines and hike rates. In a slowing economy with rising rates, growth stocks don't do well.But the market has quickly moved past those issues. Concerns about trade were overstated, as many of the tariffs imposed by President Trump have grace periods and delays, implying that both sides still want to get a deal done soon. Meanwhile, the U.S. economy really isn't slowing by much, as first-quarter sales and earnings have been way stronger than expected. Additionally, inflation remains muted, so the Fed will stay on the sidelines.In other words, we are still in the midst of a strong economy with muted inflation. That environment is a dream combination for growth stocks. As a result, growth stocks will remain in favor, and that will help Uber stock price. Employees Won't Sell Uber StockAn important determinant of the performance of stocks that have recently gone public is insider sentiment. Specifically, skeptics often think that insiders use IPOs to unload shares to public investors, so that the insiders can sell their shares at favorable prices. Insider selling, in turn, pressures stocks, ultimately causing them to head lower.That may have happened to Uber stock during its first few days of trading. It's tough to tell. But the important thing is that the phenomenon probably won't last much longer.According to a survey by Blind, nearly 80% of Uber's employees believe that Uber stock is undervalued, while only 8% think it is overvalued. Employees own a great deal of Uber stock. There are lock-up periods and other restrictions which will prevent them from selling some of their shares anytime soon. But the fact that only 8% of employees think Uber stock is overvalued implies that, at these levels, there won't be much insider selling pressure.Without that insider selling pressure, buyers should remain in control of Uber stock price. Profitability Concerns Are OverstatedThe biggest knock against Uber stock is the amount of red on the company's income statement. The company generates billions of dollars in net losses every year, and its cash burn rate hasn't really improved all that much. Plus, it's facing big-time competition in the ride-sharing market, and that competition ultimately caps how high Uber's margins can go.But these profitability concerns are overstated.Here's a long list of stocks from the past few years which were all unprofitable at the time of their IPOs: Shopify (NYSE:SHOP), Square (NYSE:SQ), Roku (NASDAQ:ROKU), MongoDB (NASDAQ:MDB), and Okta (NASDAQ:OKTA). All of those stocks are up by tremendous amounts since their IPOs, mostly because their margins have risen as their businesses have grown, and, as a result, they are either already producing or are on the verge of producing sizable profits.Uber will be no different. Its gross margins are positive and climbing. Its operating-spending rate is falling and will continue to drop as its business grows. Thus, as Uber's gross margin rate rises and its operating-spending rate falls, it's only a matter of time before Uber becomes profitable. Uber's Long-Term Growth Opportunity Is TremendousThe biggest reason to buy and hold Uber stock for the long run is that this company is just scratching the surface of its global-growth potential.Uber is the global ride-sharing king. But ride-sharing currently accounts for only a few percentage points of global vehicle-based transportation. Current trends imply that ride-sharing should eventually become at least 20%- 30% of the global vehicle-based transportation market. A few of those current trends are as follows: * The coordinated economy. Read more about it here. * There are simply too many cars on the road. Population growth and urbanization will only aggravate traffic headaches. Lowering the volume of cars on the road through ride-sharing services simply makes sense, and will make transportation more convenient. * Ride-sharing can expand into new vertical markets, including transportation of goods and food. * The goods and food transportation verticals are primed for tremendous growth, thanks to the increased popularity of ordering food and clothes from home.All in all, the ride-sharing economy should grow by leaps and bounds over the next several years. Uber is the leader of multiple vertical markets within the global ride-sharing economy. As long as the company maintains this leadership position (and it should because of its unparalleled liquidity network effects), then Uber should continue to grow rapidly over the longer term, boosting Uber stock price in the process. The Bottom Line on Uber StockThe Uber IPO was a dud because of macro economic worries. Those concerns have faded. Now Uber stock is in the early stages of a long-term uptrend. If you bought the dip of Uber stock, hold onto it. If you didn't buy the dip previously, look to purchase the shares on any further weakness. This stock will be a long-term winner.As of this writing, Luke Lango was long UBER, SHOP, SQ, ROKU, MDB, and OKTA. More From InvestorPlace * 4 Top American Penny Pot Stocks (Buy Before June 21) * 7 Safe Stocks to Buy for Anxious Investors * 4 Tech Stocks Looking Vulnerable * Should You Buy, Sell, Or Hold These 7 Hot IPO Stocks? Compare Brokers The post 4 Reasons to Buy Uber Stock on Weakness appeared first on InvestorPlace.
My skepticism toward Shopify (NYSE:SHOP) looks absolutely foolish at this point. Shopify stock has been one of the most torrid stocks of 2019 and only continues to climb. SHOP stock has pulled back in recent sessions, but still has gained 93% so far this year.Source: Shopify via FlickrLike a lot of investors, I like the Shopify business; in fact, I recommended the stock several times last year. Of late, however, I've pointed to valuation, arguing most recently in April that SHOP stock, at $206, was due for a big fall.That call was wrong. Shopify stock has risen another 30% in the seven weeks since then. But I haven't been alone in seeing the stock as overvalued. On this site, Dana Blankenhorn called SHOP a bubble in March, and repeated that sentiment last week. Luke Lango called it one of the market's best growth stocks - and still argued the price was too high.InvestorPlace - Stock Market News, Stock Advice & Trading TipsWall Street has expressed similar caution. Three different analysts downgraded Shopify stock last week. Even Barron's has noted that it and some of those analysts had heard from disgruntled readers after negative coverage of the stock.Seemingly everyone sees SHOP as a stock that has run too far, too fast. But as traders know, that alone might suggest more upside is ahead. It's not until the entire market sees a stock's upside as inevitable that the stock usually turns.Yet at the same time SHOP stock trades at seemingly unsustainable valuations. If sentiment suggests more upside, what about the fundamentals? * 7 Stocks to Buy for Over 20% Upside Potential SHOP Stock and the FutureOne way to consider the current valuation of SHOP stock is to understand what type of future the market is pricing in. Investors should discount Shopify stock by at least 10% a year, to account for its risk and volatility.At the moment, SHOP has an enterprise value (market cap less its ~$2 billion in cash) of $27.6 billion. That means investors believe the company should be worth about $44 billion Five years from now - and $71 billion in a decade.Looking solely at revenue, that seems at least potentially doable. Revenue is expected to be about $2 billion next year. The current growth profile suggests a path to a double, at least, over the next four years. Is, say 9x 2024 revenue of $4.8 billion unreasonable? Or 7x 2029 sales of $10 billion?Those revenue levels might seem unreasonable, but the $10 billion target only suggests an average growth rate of 20% from 2020 on. With opportunities for international growth, and potentially new offerings (think CRM software or marketing capabilities) that growth rate is not impossible.Nor are the revenue multiples untenable. Bear in mind that the margins on incremental revenue should be enormous. If Shopify can add $8 billion in revenue, there's no reason why it can't grow profit by $2 or even $3 billion. At a 25% tax rate, net income even at the low end of that range gets to $1.6 billion or so. Here, too, is a 45x P/E multiple that unreasonable assuming Shopify still has years of growth ahead from that point? Investors Modeling Shopify StockTo be clear, I'm not making the case for that model. Analysts aren't, either. Even before the downgrades of late, SHOP stock had outrun average Wall Street targets.But the point is that some investors might. And as long as there's a case on paper for Shopify stock, there's going to be room for upside. This is a hugely attractive business model. The addressable market is only going to expand as Shopify expands internationally and drives more revenue for medium- and large-sized businesses.Shopify could choose to challenge Salesforce.com (NYSE:CRM) in CRM software. It might be able to drive advertising revenue from customer websites (something akin to what Amazon.com (NASDAQ:AMZN) and Walmart (NYSE:WMT) are doing at the moment).Again, none of this is to say Shopify will do these things. But it's posting enormous growth, has a massive market, and is accumulating ever-more valuable customer data. And while at 14x next year's revenue and about close to 300x next year's earnings the current multiples look extreme, there's a path on paper for SHOP stock to grow into its current valuation.In a bull market, that can be enough. It's not like Square (NYSE:SQ), a potential rival, is cheap. CRM stock itself has seemed "overvalued" for years and keeps moving higher. This can work, at least in theory. Combine that with the negative sentiment, the so-called "wall of worry," and SHOP can continue to climb. How High?For what it's worth, I personally don't see any of this happening. I still believe investors are ignoring two key risks to SHOP stock. The first, as I wrote last year, is that the company retains significant exposure to small businesses that are usually the first victims of any economic downturn.The second, related, risk was highlighted by Morgan Stanley (NYSE:MS) in its downgrade last week. Over half of Shopify revenue is transaction-based. That, too, implies some exposure to economic cycles.The combination means that Shopify doesn't quite have the SaaS (software-as-a-service) model that is priced in at the moment. It's not going to drive the same amount of sticky, recurring revenue that is creating such optimism for SaaS plays. As a result, it shouldn't have the straight-line growth of a company like Salesforce.com (whose revenue growth has been almost spooky in its consistency).If that's the case, SHOP shouldn't be receiving a premium to pretty much every other SaaS stock. It should be receiving a discount. But, right now, many investors clearly disagree. And history shows they can disagree for quite a long time.In the meantime, SHOP can keep climbing the wall of worry. It's not impossible to project SHOP being a $100 billion business a decade or so from now. That in turn suggests that Shopify stock, today, should be worth around $360.I'm not saying SHOP will get there. I don't believe it should get there. But between the optimism in the chart and the pessimism everywhere else, I certainly wouldn't bet my money against it.As of this writing, Vince Martin has no positions in any securities mentioned. More From InvestorPlace * 4 Top American Penny Pot Stocks (Buy Before June 21) * 7 Stocks to Buy for Over 20% Upside Potential * 5 Large-Cap Stocks Holding Steady Amid Trade War Concerns * 7 ETFs for Healthy Healthcare REITs Compare Brokers The post If Shopify Stock Is Ever Going to Stop, It's Hard to See When appeared first on InvestorPlace.
Another jittery week seems to be upon the markets as news headlines highlight that the U.S.-China trade negotiations may be at an impasse. Trade is not a zero-sum game and tariff tiffs will likely affect many companies, countries, and consumers at different levels. Understandably many investors are beginning to get nervous as to where stocks in their portfolios may be headed next. Therefore, today I'd like to discuss the short and long-term outlook for Square (NYSE:SQ), the mobile-payments company.Source: Via SquareFintech is an evolving and growing industry. And the global economy is gradually shifting from cash to cash-less payments. With its strong small business focus and proactive management, Square stock is likely to weather the long-term ebbs and flows of the industry. However, there might be further weakness in the SQ stock price -- after losing 9.2% in the past month -- in the near-term that potential investors should anticipate. Square's Growing EcosystemAlthough it started as a payments company, Square has in recent quarters introduced a range of software, hardware and apps to service small businesses, individual clients and act more like a traditional bank. Its most recent earnings report released on May 1 and accompanying shareholder letter provide a good overview of the growth in service offerings.InvestorPlace - Stock Market News, Stock Advice & Trading TipsSquare's ecosystem combines software with hardware to especially enable sellers to turn their mobile devices into point-of-sale (POS) solutions. In other words, through various growth initiatives, SQ management is now aiming to make the company a major player in the fintech apps sphere as well as a small business platform that offers a wide range of services.For example, SQ's peer-to-peer mobile payments Cash App has more than 15 million monthly active customers. Square charges 2.75% per transaction to businesses that accept Cash App payments. It also makes money through individuals using the app. * 6 Chinese Stocks That Could Pop On a Trade Deal Management would like to see the Cash App become more like a traditional bank whose core customers are small businesses as well as individuals. As the younger generations especially are making a drastic shift to using electronic payments, Square would like to capture that growth.In October 2018, the group announced Square Installments, which lets customers pay in monthly installments. Previously, Square had also launched Square Capital, which provides short-term loans to small businesses that use its service to process credit card payments.Clearly, Square is expanding its services and merchant ecosystem across different channels and many growth investors are bullish long term on Square stock. However, they would need to pay special attention to how each business that Square is now chasing contributes to the bottom line.While Square currently enjoys a head start in serving small businesses, Wall Street has some questions as to whether the group can maintain a sustained growth quarter after quarter. What Could Derail Square Stock Fundamentally?The global payments industry is a $100 trillion plus market. And the fintech apps revolution is fast changing the way traditional banks, credit card issuers and mobile-payments companies work with businesses as well as retail customers.Such a big industry inevitably attracts both domestic and global competition. Square faces competition from many well-capitalized companies, including the global online payments group PayPal Holdings (NASDAQ:PYPL), transaction processing leader Visa (NYSE:V) and Fiserv (NASDAQ:FISV), which is shaping up to become a global payments giant.To be sure, not every area Square expands into will necessarily translate into easy money. Unless Square increases its revenue base, Wall Street may not be too forgiving about the SQ stock price. Therefore, from a valuation point of view, I'd urge long-term investors to exercise caution with the current price levels.For example, many analysts are expressing doubts over Square's expansion into the loan business and questioning whether the company is taking on too much risk.Another are of potential concern would be declining growth in transaction fees, which still provide the majority of revenues. Square's shifts toward subscription and services revenues may not be enough to make up for the decline in transaction fees.The May 1 earnings report showed that the group's gross payment volume (GPV) grew to $22.6 billion, at a relatively modest rate 27%. Yet Wall Street was concerned about this growth rate.In other words, shareholders would need to decide whether the company has potentially diversified way too much and away from its core business of payment processing. Therefore, they'd need to regularly re-assess their views based on company and sector developments as well as earnings statements. Where is Square Stock Price Now?Let us briefly remember how SQ stock price has acted over the years.Following its initial public offering (IPO) in late 2015, the price of SQ stock surged from $9 to an all-time high of $101.15 in October 2018 as the company became a darling among long-term investors.With such high return on initial investments, many investors look at the future through rose-colored glasses as they tend to assume growth rates will accelerate for many years. That's how recent IPOs usually become momentum stocks. However, if growth decelerates, then the stock price usually suffers. In other words, a momentum stock like Square trades in line with revenue growth trends and expectations.Despite the euphoria in the first three years, SQ stock price has been exhibiting price weakness since all-time high on Oct. 1, 2018. This year, although the stock is so far up 16%, April and May have not been good months for shareholders. The weak Q2 guidance issued during the Q1 conference call triggered the recent downtrend.If you are looking for an entry signal to buy SQ shares, from a technical chart perspective, I am not expecting the stock to make a significant leg up any time soon. Square stock will need to stabilize and build a base again before a long-term sustained leg up can occur.And, I do not expect the SQ stock price to reach the $100 level any time soon; the market may be starting to price the stock with a more realistic and fair view.The daily volatility of Square stock is high, giving it a broad trading range, so short-term traders should proceed with caution. Expect nearer-term trading in SQ to be choppy at best. So Should You Buy SQ Stock in May?I believe the volatility and selling in the markets will continue in May as well as in June. Like many momentum plays, SQ stock is likely to be a battleground between two camps: investors and traders.Depending on news headlines, Square stock may trade sideways for several days, only to continue to pullback toward the low-$60's level, where it is likely to find initial support.If the support around $60 level does not hold, then it may fall further to $50 level, where I'd expect SQ stock to start to stabilize and then trade sideways until the next earnings release, expected in late July. * 7 High-Yield REITs to Buy (Even When the Market Tanks) Indeed, Square stock may become one of the first momentum stocks to test the lows it saw between $49-50 in December 2018, hence making a double bottom in technical charts. Only then the twice-touched low may become a more reliable long-term support level.In other words, I'd not rush to buy Square stock yet. However, I'd get ready to initiate a position as the price declines further, toward $50. I'd also consider buying covered calls in conjunction with going long on SQ shares.If you already own the shares, you might want to stay the course and hold your position. That said, if you are worried about short-term profit taking, then within the parameters of your portfolio allocation and risk/return profile, you may consider placing a stop loss at about 3-5% below the current price point, to protect your profits to date. Bottom Line on Square StockStocks suffer during times of uncertainty and the current political and economic fundamentals offer plenty of questions. Therefore, I'd encourage potential new investors to wait for a few weeks until the smoke clears from the markets and until buyers are definitively back in control in Square shares.Until that time, Square is likely to be a one-step forward, two-steps back kind of stock until it reaches low $50's level. On a final note, if the SQ stock price declines further amid a subdued earnings season, the company could very well become a takeover target.As of this writing, the Tezcan Gecgil did not hold a position in any of the aforementioned securities. More From InvestorPlace * 4 Top American Penny Pot Stocks (Buy Before June 21) * 7 Stocks to Buy for Over 20% Upside Potential * 5 Large-Cap Stocks Holding Steady Amid Trade War Concerns * 7 ETFs for Healthy Healthcare REITs Compare Brokers The post Hot Fintech Market Has Investors Eyeing Rebound in Depressed Square Stock appeared first on InvestorPlace.
PayPal Holdings (NASDAQ:PYPL) may have established the digital-payments industry, but there's no denying that its rival, Square (NYSE:SQ) has won the war of publicity since the start of 2018.There's a secret that only owners of PayPal stock know, however, or at least realize. That is, after crushing it in 2017 and holding its ground in 2018, PayPal stock price is crushing it again this year. * 7 Stocks to Buy for Over 20% Upside Potential This may not be the absolute most opportune time to buy PayPal stock if you haven't done so yet; given the frothiness of PayPal stock price, PYPL stock is ripe for some profit-taking. But, there's a reason PayPal stock price is still climbing as if PYPL was a new, high-growth company.InvestorPlace - Stock Market News, Stock Advice & Trading Tips Still Chugging AlongIf you want a number, it's 35%. That's how much PayPal stock price is up since the end of 2018, versus the S&P 500's 15% advance.Even more remarkable is that the big gain took shape at a time when few thought it would, or even could. Early last year eBay revealed it would begin featuring PaPal's Dutch rival, Adyen. In the meantime, Square found a way to facilitate peer-to-peer payments every way except the primary way that PayPal serves consumers and small businesses. PYPL wasn't (and still isn't) interested in handling cryptocurrencies at a time when cryptocurrencies were all the rage. As of late-December, the consensus price target on PayPal stock was just under $100 per share.None of it really mattered, though. As it turns out, PayPal is even better when it's left alone and allowed to do its own thing without anyone standing over its shoulder.The numbers tell the tale. PayPal's revenue surged 13% last year,. and its non-GAAP earnings per share jumped 26%.After, blasting past the consensus price target in April, PayPal stock closed yesterday at $112.15. The Outlook of PayPal StockThis year is expected to be even better for PayPal. Analysts are calling for more than 16% revenue growth in 2019, followed by more than 17% growth next year. Its EPS is expected to reach $2.98 this year and hit $3.51 in 2020.That leaves little to complain about. The acquisition of Venmo and better cultivation of its Merchant Services arm -- which is a stab right at Square -- have been worth the expense and effort. In Q4, Merchant Services' revenue jumped 29% year-over-year. After PayPal works to improve the integration of iZettle, which it acquired last year, the subsidiary should continue to grow by double-digit percentage levels.The key for PayPal stock has been, according to BTIG analyst Mark Palmer, size that others like Square can't match.Palmer also notes that Venmo is nearing profitability, which could prove to be a major catalyst for PayPal stock. ""PayPal's progress toward monetization of Venmo has accelerated," noted the analyst earlier this month. He adds, "The app had 40 million users at the end of 1Q19 and at that point had an annual revenue run-rate of more than $300 million, a sizeable jump from the annual revenue run-rate for the app of more than $200 million that management had announced in January."All told, Palmer now thinks PayPal stock is worth $130 per share. Not YetWhile the rest of the analyst community isn't quite as enthused, given the consensus price target of $116, their unwillingness to raise their targets may have more to do with this year's bullish surge and less to do with a lack of value.That crowd still has a point. The steep rally, while not unlike 2017's big move, has pushed PYPL stock to prices that will be difficult to hold onto. This week's snapback rally into new-record territory is exciting, but also uncomfortably hot.Where any pullback may finally stop and reverse is difficult to say. There's a major support level near $80. A selloff of that scope seems unlikely given the company's outlook, however. More plausibly, a retreat to one of the moving average lines around $100 or $93 will stop any bleeding of PayPal stock.The toughest part of trading is being patient when waiting to buy stocks, and mustering the willingness to pull that trigger in the midst of a pullback. Don't shoot for perfect timing, and don't sweat it if you wade in too early. PYPL is a long-term trade driven by fundamentals that have remained surprisingly solid.As of this writing, James Brumley did not hold a position in any of the aforementioned securities. You can learn more about James at his site, jamesbrumley.com, or follow him on Twitter, at @jbrumley. More From InvestorPlace * 4 Top American Penny Pot Stocks (Buy Before June 21) * 7 Stocks to Buy for Over 20% Upside Potential * 5 Large-Cap Stocks Holding Steady Amid Trade War Concerns * 7 ETFs for Healthy Healthcare REITs Compare Brokers The post PayPal Is Impressive, But It's the Wrong Time to Buy PayPal Stock appeared first on InvestorPlace.
Square (NYSE:SQ) continues its slide. The San Francisco-based payment services company has moved lower even as its peers continue to see their stocks go higher. Despite a steady decline, analysts have mostly held to their price targets on Square stock. Although SQ may remain range-bound for some time to come, investors now have an opportunity to make a trade. Source: Chris Harrison via Flickr (Modified) Given Square's recent trading activity, where it goes from here remains in question. The stock has fallen steadily since its 2019 peak of $82.78 per share in late February. The company provided weak guidance in its quarterly report on May 1. Hence, earnings and revenue beats for the most recent quarter failed to stem the tide. As a result, SQ trades near the $65 per share level.What makes this more confusing is that our increasingly cashless society will require Square's services. This trend has benefitted peers such as PayPal (NASDAQ:PYPL) over the last year. Consequently, PayPal and peers such as Visa (NYSE:V), Mastercard (NYSE:MA), and American Express (NYSE:AXP) have exhibited remarkably similar trading patterns over the last year.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 7 High-Yield REITs to Buy (Even When the Market Tanks) Not Square.I had taken a bearish position on Square stock in recent months. Even with an improving outlook, I thought SQ would face short-term pain back in March. However, with a further 15%, I have recently begun to hold a more bullish outlook. Square Stock Should Clear TargetsAnalysts appear to agree. The average price target on SQ currently stands at $83.50 per share, very close to the stock's 2019 high. On the low end, one analyst set a $30 per share price target. I could see such a price in a recession. However, with a growing economy and a predicted earnings growth rate of 59.6% this year, I do not think such an outcome will occur.The highest current price target comes in at $101 per share, near the level of its 52-week high. Hence, barring a recession, SQ stock should remain in its range for now.The good news for SQ bulls is that the stock price can rise even if Square remains range-bound. Although profit growth will fall modestly, Wall Street predicts that earnings will still grow at an average rate of 45.47% per year over the next five years. Currently, SQ also supports a forward price-to-earnings (PE) ratio of about 57. With its current level of profit growth, I do not see the PE ratio falling significantly in the near term. Square Stock and ExpansionFor investors who want to look beyond the short term, Square also continues to bolster its ecosystem with new products and initiatives. One example involves its Square Online store.After acquiring Weebly, it was able to offer clients a more comprehensive online store. This now makes Square a competitor of Shopify (NYSE:SHOP) and expands its reach in the fast-growing e-commerce industry. Now, with its recent alliance with Postmates, the reach of its ecosystem expands further.Financial services has also become a focus. Square already makes business loans. In recent months, it has also attempted to expand on its Cash App and break into banking itself. However, this move to gain FDIC approval and become an industrial loan company still needs to pass regulatory hurdles.Moreover, Square has only scratched the surface of its potential reach. Currently, the company only operates in the U.S., Canada, Japan, Australia, and the U.K. Though it has not announced plans to move into other countries, it holds tremendous potential offshore.All of these factors should eventually translate into growth for SQ stock, even if the equity remains range-bound for some time to come. The Bottom Line on Square StockThanks to the falling price, traders have an improved opportunity for short-term gain as the long-term outlook improves for investors. A falling stock price continues to take SQ toward the lower end of its current range.Analysts have held to their $83.50 per share price target. Further, Square continues to expand its ecosystem as they add e-commerce storefronts, small business loans, and delivery. The company also offers a bright future to investors with likely moves into banking and other foreign markets.Whether one wants to make a short-term trade or build a long-term investment, SQ stock has fallen to a level where both types of investors can likely swipe in profits.As of this writing, Will Healy did not hold a position in any of the aforementioned stocks. You can follow Will on Twitter at @HealyWriting. More From InvestorPlace * 4 Top American Penny Pot Stocks (Buy Before June 21) * 7 High-Yield REITs to Buy (Even When the Market Tanks) * 5 Great Blue-Chip Stocks to Buy Today * 7 Tech Stocks to Buy That Are Also Perfect for Retirement Compare Brokers The post With $83 on the Horizon, Square Stock Finally Is Cheap Enough to Buy appeared first on InvestorPlace.
PayPal (NASDAQ:PYPL) has been ringing the register for shareholders in 2019. And off and on the chart, that looks set to continue in PayPal stock. Let me explain.Source: Official Leweb Photos Via FlickrDoes the U.S. and China's trade war and its potential implications on consumers and businesses have you concerned? In Friday's trading, it certainly had Wall Street's attention.The S&P 500 fell by roughly 0.50%, while PayPal stock found itself under even more duress -- shedding about 1%. Peer-mobile payments play Square (NYSE:SQ) is off 1.25%. But the potential real losers are companies like Apple (NASDAQ:AAPL) which is down a bit more than 2% or the 4.5% bashing in Deere (NYSE:DE).InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 7 High-Yield REITs to Buy (Even When the Market Tanks) Behind the market's U-turn is the optimism of the past couple days that the world's two largest economies could find a quick fix quickly faded after Chinese state media deferred expectations for a deal at next month's G-20 summit meeting in Japan. But don't think for a second this is what really matters for PayPal stock.Despite persistent and nagging uncertainties, it's important to focus on the big picture for PayPal stock and not quick-to-flip, daily-market-based, back-and-forth cheers and jeers. And bottom, top and squiggly price lines -- following last month's supportive quarterly confessional led by the company's sizzling digital wallet Venmo business and an equally beneficial price chart showing more than just hopeful promise, it's time to consider going long PayPal stock. PayPal Stock Weekly Price Chart Click to EnlargeIt's been a good year for PayPal stock. Shares are up 32% for 2019 and have captured 20% since breaking out of PYPL stock's year-long, base-on-base pattern in late January. So, what next? I see more upside potential.I believe technically shares can match the gains of the prior bullish leg from April 2017's breakout near $45 to the high of 2018's year-long congestive base. Some investors refer to this type of continuation action as a mirror move or two-step pattern. And in this instance, should it play out that way, PayPal stock should rally towards $140-$150.There's no guarantees of course. And PYPL stock's weekly stochastics are currently overbought. Still, if price and volume matter most, Thursday's relative strength breakout on increased volume to fresh highs from a short two plus week flat base does look compelling.For like-minded investors I'd recommend buying PayPal stock above $115.39. This entry is 1.5% through the pattern high and about .5% north of Thursday's high of $114.66.The purchase obviously sacrifices a tiny bit of upside. But if we're correct about the PYPL's trajectory, it's well worth the cost as this strategy looks to avoid buying a false breakout after the broader market's quick snap back from its trade war panic.Disclosure: Investment accounts under Christopher Tyler's management do not currently own positions in any securities mentioned in this article. The information offered is based upon Christopher Tyler's observations and strictly intended for educational purposes only; the use of which is the responsibility of the individual. For additional options-based strategies, related musings or to ask a question, you can find and follow Chris on Twitter @Options_CAT and StockTwits. More From InvestorPlace * 4 Top American Penny Pot Stocks (Buy Before June 21) * 7 High-Yield REITs to Buy (Even When the Market Tanks) * 5 Great Blue-Chip Stocks to Buy Today * 7 Tech Stocks to Buy That Are Also Perfect for Retirement Compare Brokers The post PayPal Stock Will Continue to Ring the Register for Investors appeared first on InvestorPlace.
San Francisco is notorious for being the most expensive city in the U.S., but that hasn’t stopped affluent tech workers from snapping up real estate in this particular neighborhood.
The technical outlook for Square (NYSE:SQ) isn't all that rosy, despite how well the company has done over the past few years. Indeed, Square stock has been a beast on the long side and has made many loyal investors a hefty sum of cash. But even with the stock market in rally mode for much of 2019, Square stock has been absent.Source: Chris Harrison via Flickr (Modified)What's going on?Shares have been rolling over as it appears there's been a bit of a "buyer's strike" regarding Square. While Square stock had a violent rally off its December lows, shares are actually flat since Jan. 15. Compare that to its peers and Square stock investors may be getting frustrated.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 6 Chinese Stocks That Could Pop On a Trade Deal PayPal (NASDAQ:PYPL) is up 22.5% in the same timeframe, while the PowerShares QQQ ETF (NASDAQ:QQQ) is up 13%. Visa (NYSE:V) and MasterCard (NYSE:MA) are up 18% and 28%, respectively. The year-to-date numbers are even worse.Stock YTD Return SQ 17% QQQ 19.3% V 24% MA 33.6% PYPL 33.8% I know it's hard to complain about a 17% gain for the year, but considering the fourth quarter that we endured, a snap-back rally like that is to be expected. The fact that it's lagging the QQQs and has generated just 50% of the return from its most compared to competitor (PYPL), and SQ stock is frustrating.Will that underperformance continue? Trading SQ Stock Click to EnlargeAbove is the weekly chart for Square stock. You can clearly see that Square was enjoying a nice, solid uptrend (blue line) for the better part of a year. However, that uptrend came to an end in Q4 2018, when the markets took a painful fall. Square, which was already elevated from its uptrend by quite a bit, was no exception to this selloff.In October, SQ stock hit a 52-week high of $101.15. By mid-December, shares had fallen more than 50% at its lows when it hit $49.82.On the bounce, shares ran to that $77.50 to $80 area, which effectively capped SQ stock from January through April. At $81.56 is the 61.8% retracement for the 52-week range, which more or less acted as resistance. Unfortunately, the 38.2% retracement at $69.43 did not support SQ stock on the downside, nor did the 50-week moving average.I worry about Square in the short- to intermediate term if it can't get over some of these technical levels. Specifically, I want to see Square over the 10-week moving average and above the 38.2% retracement. Over downtrend resistance (purple line) would eventually be nice too.If it can't do that though, it's prone to more declines. Those declines are exacerbated in the event that U.S. stocks take a bigger hit. I have my sights on three potential downside levels: $60 is a notable level of both resistance and support and only gave way amid a flood of selling in December. At $55 is the 100-week moving average, which should provide a bounce should SQ stock test it.Finally, a retest of the lows near $50 should attract buyers. I don't expect this level without a larger flush in the broader market. Bottom Line on Square StockSquare has been a multi-year stud, but that action has not translated to 2019. The company still has a terrific growth profile, with analysts modeling revenue and earnings to grow 43.5% and 60% this year, respectively; 2020's forecast is solid too, at 35% and 49% growth, respectively.While management provided a solid full-year outlook on May 1, second-quarter guidance came up a bit short. At 88 times this year's earnings (after the earnings pullback), SQ stock doesn't have much room for error. Disappointing on guidance, however marginal, can sap momentum in a hurry.Let's see where Square stock can firm up and whether it can regain momentum. Over the 10-week will be the first sign of turning it around.Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell. As of this writing, Bret Kenwell is long V. More From InvestorPlace * 4 Top American Penny Pot Stocks (Buy Before June 21) * 7 Stocks to Buy that Lost 10% Last Week * Top 7 Dow Jones Stocks of 2019 -- So Far * 5 Service Stocks That Can Win the Trade War -- According to Goldman Sachs Compare Brokers The post If Square Stock Starts to Fall It Might Be Hard to Stop appeared first on InvestorPlace.
Buckingham Research analyst Chris Brendler reiterated his bullish view of Square Inc.'s stock and called it his "top pick by far" in payments. "We think the market is missing what we view to be a key positive from 1Q results: the shockingly high [total payment volume] penetration in the new Square Card for Sellers," he wrote, referring to a debit card that lets Square merchants immediately spend their funds at stores. With TPV penetration at "already over 20%, we think this is much higher than anyone expected and our analysis suggests huge upside potential, ~12 ppt tailwind to 2021 revenue growth." Brendler rates the stock a buy with an $100 price target. Shares have dropped 14% over the past three months, as the S&P 500 has risen 2.7%.