Why Square Inc. (NYSE: SQ) Is Still a “Buy” After a 5% Jump on Monday

After falling 55% with the market during the recent coronavirus correction, SQ stock has significantly outperformed.

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Since its inception in 2009, CEO Jack Dorsey and his team at Square have been on a mission to help all 7.8 billion people on Earth participate and thrive in the economy.

The company makes commerce easy with their in-store credit card readers. And it makes the economy more inclusive for everyone with its in-house payments and investing platform, the Cash App – introduced in 2015.

Cash App is the fastest growing digital wallet in the U.S. In just two years, from 2017 to 2019, monthly active users more than tripled from 7 million to 24 million.

Not only does the Cash App conveniently allow people to virtually send money to each other through their connected bank accounts for free, it also acts a commission free brokerage platform for trading full or fractional shares of stocks and Bitcoin.

If you can’t afford to buy one share of Amazon.com Inc. (NASDAQ: AMZN) for approximately $2,600 or one Bitcoin for $9,700, then you can use the Cash App to buy as little as $1 worth at a time – completely for free.

Cash App makes money by charging businesses to use their application and individual users transaction fees to access additional services. And in fiscal 2019, Cash App revenues jumped 157% year-over-year to $1.1 billion.

After falling 55% with the market during the recent coronavirus correction, SQ stock has significantly outperformed.

Its run from $38 in mid-March to $90 today represents a gain of 137%, bringing it higher than its pre-COVID-19 levels.

The fundamentals with Square are strong as analysts are expecting Cash App users to top 40 million by the end of the 2020.

Combine that with the recent technical momentum, and it’s reasonable to assign a $150 price target to the stock. That represents potential gains of 67%.

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