Square (SQ) Performed Well in Q4 Amid High Expectations, Skepticism - BTIG
BTIG reaffirms Square (NYSE: SQ) with a Buy rating and $15 price target following the company's first post-IPO earnings report.
Analyst Mark Palmer noted that Square faced a mix of high expectations and significant skepticism with its Q4 report. The analyst also noted the following:
- Square (SQ)...after the market close released its 4Q15 report that we believe exceeded expectations in key metrics and may address some of the lingering doubts about the company's ability to continue to grow rapidly amidst heavy competition in its space. In particular, SQ posted year-over-year adjusted revenue growth and gross payment volume (GPV) of 64% and 47%, respectively. The market had expected results of around 50% and 40%, respectively, in those two line items.
- SQ also guided to FY16 adjusted revenue of $600 million to $620 million, which would represent growth of 32% to 37%, and projected that its adjusted EBITDA would turn positive at $6 million to $12 million. (It lost $6 million in adjusted EBITDA in 4Q15.)The lower end of the adjusted EBITDA estimate was above the consensus ahead of the report.
- SQ announced an adjusted loss per share of $0.20 that trailed the consensus estimate of a loss per share of $0.14 and our estimate of a loss per share of $0.07. However, at this stage in the company's lifecycle its top-line growth is much more meaningful than its bottom line, in our view, and it has been management's primary focus.
For an analyst ratings summary and ratings history on Square click here. For more ratings news on Square click here.