Square Inc. (SQ) Volatility Spurs A Quest For Clarity

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    Morgan Stanley Investment Managem. recently announced the acquisition of new stake in Square Inc. (NYSE:SQ). The institutional investor has increased its shareholding in the Technology company by 160.23% to 28.33 million shares with purchase of 17.44 million shares. This fresh investment now brings its stake to 7.80% valued currently at $3.68 billion. In addition, Fidelity Management & Research Co. raised its holdings by 1.33 million to 12.1 million shares. And Wellington Management Co. LLP has lifted its position by 5.32% or 0.55 million shares – to 10.8 million shares.

    With over 8.79 million Square Inc. (SQ) shares trading Monday and a closing price of $151.79 on the day, the dollar volume was approximately $1.33 billion. The shares have shown a negative weekly performance of -0.45% and its price on 08/24/20 lost nearly -2.13%. Currently, there are 440.12M common shares owned by the public and among those 364.30M shares have been available to trade.

    An analysis of what Wall Street brokers have to say about the expected price targets for this stock gives us this picture: 41 analysts who have offered their price forecasts for SQ have a consensus price objective of $149.95. The analysts have set the share’s price value over the next 12 months at a high of $210.00 and a low of $44.00 should the stock experience a downside. Incidentally, analysts’ outlook for the Square Inc. stock is 2.70 for the next 12 months. The average price target is -7.15% below its last price level and a downside to the estimated low will see the stock lose -244.98% over that period. But an upside of 27.72% will see the stock hit the forecast high price target while mean target price for the stock is $160.00.

    Insiders at the company have transacted a total of 209 times over the past 12 months, according to data filed with the U.S. Securities and Exchange Commission (SEC). 70 of these insider trades were purchases, accounting for 8,152,508 shares. Insider sales of the common stock occurred on 139 occasions, with total insider shares sold totaling 7,655,917 shares.

    The top 3 mutual fund holders in Square Inc. are Vanguard Total Stock Market Index, Vanguard Extended Market Index Fu, and Nikko Asset Global Fintech Equity. Vanguard Total Stock Market Index owns 10.32 million shares of the company’s stock, all valued at over $1.34 billion. The company sold 27136.0 shares recently to bring their total holdings to about 2.84% of the shares outstanding. Vanguard Extended Market Index Fu sold 22478.0 shares to see its total holdings shrink to 4.85 million shares valued at over $629.96 million and representing 1.34% of the shares outstanding. Nikko Asset Global Fintech Equity sold -0.22 million shares to bring its total holdings to over 4.0 million shares at a value of $519.91 million. Nikko Asset Global Fintech Equity now owns shares totaling to 1.10% of the shares outstanding.

    Shares of Square Inc. (NYSE: SQ) opened at $159.00, up $3.9 from a prior closing price of $155.10. However, the script later closed the day at $151.79, down -2.13%. The company’s stock has a 5-day price change of -0.45% and 87.88% over the past three months. SQ shares are trading 142.63% year to date (YTD), with the 12-month market performance up to 145.69% higher. It has a 12-month low price of $32.33 and touched a high of $159.47 over the same period. Currently, 8.79 million shares have been traded, compared to an average intraday trading volume of 13.13 million shares. The stock is trading above its simple moving averages at the SMA20, SMA50, and SMA200, as the current price level is off by 7.55%, 22.17%, and 84.36% respectively.

    Institutional ownership of Square Inc. (NYSE: SQ) shares accounts for 82.60% of the company’s 440.12M shares outstanding. Mutual fund holders own 39.31%, while other institutional holders and individual stakeholders account for 43.46% and 2.02% respectively.

    It has a market capitalization of $67.65B and a beta (3y monthly) value of 2.73. The stock’s trailing 12-month PE ratio is 336.56, while the earnings-per-share (ttm) stands at $0.45. The company has a PEG of 9.46 and a Quick Ratio of 1.70 with the debt-to-equity ratio at 1.16. Price movements for the stock have been influenced by the stock’s volatility, which stands at 4.29% over the week and 4.71% over the month.

    Analysts forecast that Square Inc. (SQ) will achieve an EPS of $0.16 for the current quarter, $0.23 for the next quarter and $1.2 for 2021. The lowest estimate earnings-per-share for the quarter is $0.03 while analysts give the company a high EPS estimate of $0.28. Comparatively, EPS for the current quarter was $0.25 a year ago. Earnings per share for the fiscal year are expected to increase by 950.00%, and 116.25% over the next financial year. EPS should grow at an annualized rate of 35.59% over the next five years, compared to 30.00% over the past 5-year period.

    If you are looking to buy this stock, then you may note that the average analyst recommendation by 41 brokerage firm advisors rate Square Inc. (SQ) as a “Moderate Buy” at a consensus score of 2.70. Specifically, 15 Wall Street analysts polled rate the stock as a buy, while 20 of the 41 advise that investors “hold,” and 4 rated it as a “Sell.”

    Looking at the support for the SQ, a number of firms have released research notes about the stock. Compass Point stated their Neutral rating for the stock in a research note on August 06, 2020, with the firm’s price target at $140. RBC Capital Mkts coverage for the Square Inc. (SQ) stock in a research note released on August 05, 2020 offered a Outperform rating with a price target of $200. Goldman was of a view on July 14, 2020 that the stock is Neutral, while Cowen gave the stock Market Perform rating on July 09, 2020, issuing a price target of $119. Piper Sandler on their part issued Neutral rating on July 07, 2020.

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