2024-02-23 09:54:13 ET
Summary
- Square's POS system growth may start to normalize due to increasing competition, but they have a significant runway for growth with their Cash App.
- Square has been shifting its focus towards mid-market sellers, which can generate higher margins and utilize a broader range of Square's add-on services.
- Square's Cash App has substantial growth potential, with opportunities to increase monetization rates and expand its user base.
Block's ( SQ ) stock price experienced a roller coaster ride during the pandemic. Nowadays, I believe their growth is transitioning back to their normalized rate. The competition in the POS system is intensifying; however, they have a significant runway for growth with their Cash App. They reported their Q4 FY23 on February 22 with a quite strong result. I initiate a 'Buy' rating with a fair value of $93 per share.
Square POS System Growth Strategy
Square's POS system is focusing on small businesses, and they have witnessed tremendous growth over the past few years. In recent quarters, the GPV growth has started to fall to a low-double-digit rate. Their "something for everybody" approach makes their solutions suitable for merchants at reasonable costs....
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Block: Huge Runway For Cash App Growth And Consistent Margin Improvement - 'Buy'