EARN25

Square Stock Retreats After Worrying Guidance

SQ's lower-than-expected fourth-quarter forecast concerns some analysts

Managing Editor
Nov 8, 2018 at 10:20 AM
facebook X logo linkedin


The shares of Square Inc (NYSE:SQ) are down 8.1% to trade at $75.94 this morning, after the payments company's third-quarter earnings report yielded mixed results. While earnings and revenue exceeded expectations, Square's fourth-quarter profit estimates came in well below Wall Street estimates, prompting concerns about the stock's valuation.

A host of analysts have chimed in with updates, both bullish and bearish. Susquehanna downgraded SQ to "neutral" from "positive," while at least five other brokerages issued price-target hikes, including Canaccord Genuity to $95 from $90. In a note entitled "It's Hip to be Square," the analyst in coverage waxed optimistically on the company's increasing market exposure and improving margins. 

On the charts, SQ has still more than doubled in 2018, and earlier this month bounced off a pair of bullish trendlines. Nevertheless, analysts are generally divided toward the equity. Of the 30 brokerages covering SQ, there is an even split between those that rate it a "buy" or better, and a "hold" or worse. 

And anyone looking to play Square, regardless of direction, may want to consider doing so with options. The stock's Schaeffer's Volatility Scorecard (SVS) reading arrives at 94 (out of a possible 100), meaning SQ has tended to make outsized moves over the past year, relative to what the options market has priced in -- a boon to premium buyers.

 

You Don’t Need 25 Alerts -- You Need ONE You Can Trust!

That’s the idea behind Trade of the Week, Schaeffer’s newest trade alert.

Every Monday morning before the opening bell, you’ll receive a single, expertly researched trade recommendation -- built from the same proprietary research we’ve been using for over four decades.

It’s not just a signal.

It’s a plan designed for traders who are tired of jumping from alert to alert without ever finding their edge.

No juggling alerts. No switching directions mid-week. Just one clear, expertly researched trade idea -- delivered before the market even opens.

👉 JOIN RIGHT NOW FOR JUST $1 TO GET THE NEXT TRADE!