Square Inc (NYSE:SQ) was off to a strong start in 2018 when and its share price hit over $100 just three months ago. Since then, however, it has crashed more than 35%. Although it’s still up 50% year to date, it’s an opportunity for investors to buy the stock at prices not seen since May.
The markets as a whole have been plummeting recently and the decline in Square’s price isn’t reflective of anything wrong or concerning with the stock itself. And that’s an important consideration, because it means there’s nothing that should be holding it down. While Square may trade at a high multiple to its book value and it has a negative price-to-earnings multiple, there’s still a lot to like about it.
For one, it was able to pull out a profit in its most recent quarter, where its sales were also up more than 50% year over year. In four of its past five quarters, Square has also generated positive free cash flow, which is something that’s going to be crucial for the company to continue to grow its business in a sustainable way.
I’m very bullish on the stock because I know the opportunity that exists for Square and the potential that it has worldwide. Investors shouldn’t be deterred by this recent decline because it won’t last. When the markets recover, Square is going to be one of the stocks to watch as it will start to take off. It may be down right now, but long term, the stock could produce great returns for investors.
Related Stories
