Stifel Reiterates Buy on Square (SQ) Following 3Q and Guidance
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Stifel maintained a Buy rating and $15.00 price target on Square (NYSE: SQ) following the company's 3Q earnings report. Adjusted revenue increased 51% y/y to $178mm, exceeding $174mm estimates and the $171mm high-end of the guided range. Management again raised its 2016 guidance to now reflect 50% Adjusted revenue growth.
Analyst Scott Devitt commented, "Square reported 3Q:16 results ahead of expectations and raised its full year guidance, again. The company grew Adj. revenue 51% y/y and generated Adj. EBITDA of $11.6mm (6.5% margin). Square raised its full year Adj. revenue guidance by $16mm and raised its Adj. EBITDA margin by 150bps. Momentum with larger merchants continued (GPV up 55% y/y) and Software and Data Product revenue accelerated to 140% y/y growth (from 130% y/y last quarter). We are raising our estimates for 2016/2017 and maintain our positive view as management continues to execute its plan to build a robust SMB services ecosystem. Our price target remains $15."
Shares of Square closed at $11.07 yesterday.
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