Square stock is flying on massive revenue beat, rosy outlook
Square stock price soared more than 4.5% after topping third-quarter revenue estimates by 50% and exceeding earnings target by 100%. Investors have been applauding the stunning financial performance of Jack Dorsey’s payments services company.
The shares of Square are up 170% since the beginning of this year amid robust growth in payments volume.
The growth is also supported by the coronavirus pandemic that has shifted consumer’s focus from traditional banking to online platforms. Square stock is currently trading around $180, down slightly from an all-time high of $190.
Robust Q3 results added to bullish sentiments
The stronger than expected third-quarter performance has further enhanced investor’s sentiments. This early growth company is likely to outperform in the days ahead amid its expansion plans and stellar demand for online payment services.
Its third-quarter revenue of $3 billion grew more than 400% from the year-ago period. Square cash app has generated $2.07 billion in revenue, up 574% from the year-ago period.
Seller gross payment came in at $31.7 billion compared to $22.8 billion in the previous quarter and $28.2 billion in the year-ago quarter.
The most prominent factor in the third quarter results is Square’s growth outside of the United States in an analyst’s view. The company has generated seller gross payment volume growth of 46% year over year outside of the US.
Square stock is likely to extend the momentum
The market analysts are optimistic about the improving trends for online payment platforms. The company expects to sustain the revenue growth momentum in the December quarter.
“While the macroeconomic environment remains uncertain, we continue to believe that our Seller and Cash App ecosystems are well-positioned to benefit from the acceleration of secular shifts, such as omnichannel commerce, contactless payments, and digital wallets for consumers.” Jack Dorsey said in shareholder’s letter.