Square’s Q3 Results Miss the Mark

Financial services and digital payments company Square (SQ) reported weaker-than-expected results for the third quarter ended September 30, 2021.

Revenue & Earnings

Square reported quarterly net revenues of $3.84 billion, a growth of 27% against the same quarter last year. The growth in net revenues was primarily driven by the 40% and 55% year-over-year growth witnessed in Transaction-Based revenue and Subscription and Services-Based revenue, respectively. The figure, however, failed to surpass the consensus estimate of $4.6 billion.

The company’s earnings per share (EPS) at the end of the quarter stood at $0.37, reflecting 8.8% growth year-over-year. Yet, the figure marginally fell short of the consensus estimate of $0.38 per share.

Other Operating Metrics

The company reported adjusted EBITDA of $233.4 million for the third quarter, growing 28.7% year-over-year.

Similarly, the company’s gross profit also saw a 43% year-over-year growth to $1.13 billion, with Seller gross profit and Cash App gross profit rising 48% and 33%, respectively, against the same quarter last year.

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Price Target

Rosenblatt Securities analyst Sean Horgan reiterated a Buy rating on the stock with a price target of $360 (upside potential of 42.5% from current levels).

The Wall Street community is cautiously optimistic about the stock with a Moderate Buy consensus rating, based on 11 Buys, three Holds, and one Sell. The average Square price target of $309 implies the stock has upside potential of 21.4% from current levels.

TipRanks Website Traffic

TipRanks’ Website Traffic Tool, which uses data from SEMrush Holdings (SEMR), the world’s biggest website usage monitoring service, offers insight into Square’s performance this quarter.

According to the tool, the Square website recorded a 17.7% monthly rise in global visits in September. Furthermore, website traffic has risen 31.1% year-to-date.