Square’s share price might be flat this year, but its customers are struggling during lockdown. How much will this affect Q1 results?
Square’s [SQ] share price is flat this year, trading at broadly the same level it did at the start of 2020, but this week’s Q1 earnings could be about to change that. Many of Square’s customers are small businesses that will have been shut during the lockdown. This is bound to have had a material effect on Square’s business. Throw in a string of analyst downgrades and Square could be looking at a sizeable dent in revenues.
What will this mean for Square’s share price? And what should traders expect in Q1 earnings?
What's happening with Square's share price?
Square's share price is down just 0.22% so far this year, trading around the $64 level. Earlier in the year, the stock had touched a high of $85.7. That was before the coronavirus outbreak hit markets, causing Square’s share price to drop to a 52-week low of $37.8 in early March.
When do Square post Q1 results?
Why should investors care?
Square's expected drop in Q1 revenue
“Whereas our prior thesis centred on our expectation that [Square’s] investments in 2020 would drive re-acceleration of revenue growth and margin expansion in 2021...we no longer have conviction in that view in the context of currently devolving consumer spending trends” - UBS analyst Eric Wasserstrom
What are analysts expecting?
Wall Street expects Square to post earnings of $0.13 per share, up from $0.11 seen in the last quarter of 2019. Revenue is expected to come in at $620.34 million.
Among the analysts, Square has a 62.74p 12-month price target price target. Hitting this would see a 1.5% downside on the current share price. Of the 31 analysts tracking the stock on Yahoo Finance 17 rate it either a Strong Buy or a Buy. The rest rate it a Hold.
|PE ratio (TTM)||80.85|
|Quarterly Revenue Growth (YoY)||40.80%|
Square share price vitals, Yahoo Finance, 5 May 2020