Piper Jaffray Raises Price Target on Square (SQ) to $11.50 Following 2Q
Piper Jaffray reiterated a Neutral rating on Square (NYSE: SQ), and raised the price target to $11.50 (from $10.00), following the company's 2Q earnings report. SQ posted adj. net revenue of $171M (+54% y/y), beating consensus estimates of $159M by 7%.
Analyst Jason S. Deleeuw commented, "SQ reported strong top-line results beating consensus revenue by 7% driven by stronger gross payment volume (GPV) growth, a slightly higher revenue yield (despite strong larger seller growth), and stronger Software and Data revenue. Adjusted EBITDA of $13M beat consensus of breakeven and drove a 7.3% margin on improved operating leverage and seller retention. SQ significantly raised its revenue and adjusted EBITDA guidance ranges, though profitability still remains tepid on an implied full-year ’16 adjusted EBITDA margin of ~3% and still significant implied GAAP EBITDA loss. We increase our PT from $10 to $11.50 on our higher revenue forecast. We remain Neutral as we expect SQ’s impressive innovation to continue to drive significant market share gains in the micro/small seller category balanced by our questions regarding L-T profitability and growth."
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Shares of Square closed at $10.44 yesterday.