Square Inc (NYSE:SQ) released its quarterly earnings on Wednesday. The company did a good job of beating its estimates as sales of $431 million came in above the $414 million that was anticipated. Earnings per share of $0.13 were also higher than forecasts of $0.11.
However, the stock was down 3% in after-hours trading as the guidance the company put out was a bit soft and it unfortunately did not meet expectations, particularly when it came to its earnings forecast for Q4.
While it may be a little disappointing, the miss on guidance shouldn’t deter investors as Square still has a lot of potential ahead of itself. With adjusted revenues increasing 68% from a year ago, the company still has a lot of avenues and places around the globe that it can grow.
The low-cost, payment-processing system is very appealing to merchants that want to sell quickly and easily, without the hassle of dealing with a big bank and costly point-of-sale devices. Square also announced earlier this year that it would be offering loans to small businesses. And while that does expose Square to some added risk, it could mean a lot more growth for its top line.
The company has achieved considerable growth over the years already, with annual sales of $552 million in 2013 quadrupling to more than $2.2 billion in 2017.
Year to date, Square’s stock has climbed more than 120%, although in the past month it has dropped more than 17%. And if after-hours trading is any indicator, we could see more of a decline to come. It could be a good opportunity for investors to catch a great growth stock on the dip.
