Analysts are optimistic about Square's stock price. Is that justified?
Square (Symbolbild)Square (Symbolbild)

Square’s stock price has been trading in a narrow range lately as investors ponder the company’s $29 billion acquisition of AfterPay. The stock is trading at $270, down about 7% from its all-time high of $290. That values the company at more than $124 billion, making it one of the largest fintech companies in the world.

Square has reinvented itself

Square has managed to reinvent itself over the years. It started as a fintech company that offered payment services to online and offline merchants. Since then, it has moved into several other businesses that are now its foundation.

One of the largest peer-to-peer payment services in the US Cash App is an example of this. Today, the service has evolved into a super app that allows people to send money to each other. It also allows customers to buy and sell cryptocurrencies.

Meanwhile, Square has also become a leading lender to businesses with Square Capital. As a result, the business is on a strong growth path. For one, the company’s total revenue has grown from more than $1.7 billion in 2017 to more than $9.7 billion in 2020. In the last 12 months, the company has earned more than $15 billion.

Now, the company is gearing up to become a leading player in the buy now, pay later (BNPL) space. A few weeks ago, the company announced that it will acquire Australian company AfterPay for $29 billion.

That’s notable because it involves one of the largest companies in the industry, with more than 60 million customers and 100,000 merchants worldwide. It competes with Zip, Affirm and Klarna. Giants like PayPal and Apple had also expressed interest in the company.

See also  Ethereum's second largest mining pool suspends operations

Analysts are optimistic about Square’s stock price. Most of them believe that the shares will continue to rise in the near future. At JP Morgan, they believe that the stock will rise to $320. Analysts at Barclays, Truist and Royal Bank of Canada (RBC) believe that the stock can rise to more than $320.

Square stock price forecast

Square Kurs 06.09.21Square Kurs 06.09.21

The daily chart shows that the price of SQ.-share rose to $283 earlier this year. Then it pulled back, dropping to $190 in May of this year. Now the stock is nearing its all-time high. It is supported by key technical indicators such as the 25- and 50-day moving averages.

However, the stock is forming a double-top pattern with its “neckline” at $190. This could be a sign that the stock could suffer a major setback. These fears will be invalidated if the stock manages to rise above its all-time high of $285.