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.
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
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.