Square ($SQ) Could Post Big Gains in 2019
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When a new year begins, people look for new opportunities to do something fulfilling. Investors look for stocks that could possibly do really well in 2019. The final quarter of 2018 was a gloomy situation for the stock market, but the sell-off across the broader market has made stocks cheaper and more accessible. That makes them attractive pickings, with the expectation that stocks will rise in the long term, around 10 years or so from now. That rise may not happen in the next few months though. However, Motley Fool analyst Daniel Sparks points to one stock that could post big gains in 2019, Square ($SQ). This financial tech company experienced a recent sell-off, but it has had some great product launches and rising growth. Sparks analyzes each factor in detail.
Revenue Just Keeps Accelerating
Let’s talk about momentum first. During 2018 Q3, Square had a year over year revenue growth of 51%, while adjusted revenue had a 68% rise during that period. In Q2 2018 the year over year and adjusted revenue growth rates were only 48% and 60% respectively. And that’s not the only thing impressive about Square. Q3 2018 was the sixth consecutive quarter of accelerating growth in revenue for the company.
Exciting Products Just Keep Coming
And Square also has some interesting products lined up as well, as it always has. The checkout product Register was launched in October 2017. Square for Restaurants was launched last spring. It is a point- of-sale system that is fully integrated and specifically developed for restaurants.
Square has always been keeping the excitement levels high with interesting products. Since 2014, Square has been launching great products such as the Build With Square application programming interfaces (APIs), Instant Deposit, Virtual Terminal, Square Capital, Invoices and Caviar. Its diverse range of products indicates the ability of the company to continue to expand its business possibilities and scalability.
Larger Sellers Getting Attracted to Square’s Products
That is attracting larger businesses towards Square to use its services. It was initially attracting only small businesses through its user-friendly payment processing tools. But with its diverse and intelligent products, it has managed to get larger businesses to notice. That could be one of the ways Square manages to maintain its amazing growth rate this year. In 2018 Q3, Square had businesses with annualized GPV (gross payment volume) of $500,000 or more. That was a big rise from 2017 Q3’s 20% and 2016 Q3’s 16%. And Square has also mentioned that GPV earned from sellers enjoying $125,000 or more in terms of annual sales rose 41% year over year. Overall GPV also had a year over year rise of 29%.
With so much potential for growth, the 42% decline of Square’s stock only provides a great opportunity for investors to enter a company that looks to keep its revenue accelerating and investors and customer businesses alike excited with its launches and expansion.
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