Square (SQ) stock has been one of the biggest winners of late, now up around 75% over the past year, and over 683% since those lows of March 2020.
It’s been an epic climb, but can Jack Dorsey‘s fintech sensation continue its momentum? Or has the stock become a tad too rich in a market that continues to reward growth and trends over value?
Despite being at the cutting edge of fintech innovation, and its $29-billion acquisition of Afterpay, which gives it a front-row seat to the Buy Now Pay Later (BNPL) race, I remain mildly bearish on the name. That said, I would reconsider my Square stance on a pullback to more reasonable levels. (See SQ stock charts on TipRanks)
Square Punches Ticket to BNPL
These days, BNPL has been hogging the headlines amid the rising appetite for American consumer debt. Whether we’re talking about Visa (V) and its Visa Installments option, or Amazon (AMZN) and its strategic partnership with Affirm (AFRM), it’s clear that the race for the BNPL lead is on.
The demand for installments has fuelled profound growth in the space, and it’s not about to slowdown anytime soon, especially if the so-called “Roaring ’20s” environment is, in fact, in play for the decade.
Undoubtedly, Afterpay’s price tag did not come cheap. While Afterpay is a terrific complement to Square’s growing portfolio of consumer fintech options (think Cash App), the stock could be in trouble if the economy falters.
Yet, if the Roaring ’20s are still in play, Square’s Afterpay acquisition will look absolutely genius, and Square could add to its already impressive growth profile.
Indeed, there are big ifs when it comes to Square stock, its valuation, and its latest acquisition.
Wall Street’s Take
According to TipRanks’ analyst rating consensus, SQ stock comes in as a Moderate Buy, with 18 Buys, four Holds, and one Sell.
The average SQ price target is $313.15. Analyst price targets range from a low of $185 per share, to a high of $380 per share.
Bottom Line
Square is firing on all cylinders with its growth.
A majority of analysts remain bullish, as the exciting growth story has become even more exciting over time, though the stock is quite expensive at the moment.
Disclosure: Joey Frenette doesn’t own shares of any stocks mentioned at the time of publication.
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