Square's (SQ) Path to the SuperApp is Through Bitcoin, Morgan Stanley Reiterates Equalweight
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Morgan Stanley analyst James Faucette reiterated an Equalweight rating and $203.00 price target on Square (NYSE: SQ) noting the 4Q20 beat largely was driven by upside from Bitcoin and better-than-feared performance in Seller. Revenues of $3,159M beat Consensus of $3,093M, with revenues ex-bitcoin of $1,403M coming in-line with Cons of $1,403M. Cash App revenues of $2,172M missed expectations of ~$2,180M, but Bitcoin revenues of $1,756M beat Cons of $1,690M..
The analyst stated "While there are a number of players in the market with ambitions of becoming Super Apps, Square's Cash App has made some of the most progress in curating engagement through its bitcoin (and now equity) trading platform. Bitcoin revenues (and gross profit) helped deliver upside to estimates in 4Q, and continues to be a key focus for the company. Given macro-related headwinds in the Seller business, we suspect bitcoin could be an ongoing source of potential upside for the company, as it drives greater user engagement and makes a sizable contribution to gross revenues".
Shares of Square closed at $250.31 yesterday.
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