Square Inc (NYSE:SQ) released its quarterly earnings on Wednesday and dropped 7% in after-hours trading as investors were underwhelmed with the company’s performance.
Adjusted revenues of $307 million finished well above the $293 million that was expected by analysts. And although Square was able to meet analyst expectations with an earnings per share of $0.06 for the quarter, ultimately it was its forecast that left investors disappointed and concerned about the company’s future growth.
For Q2, Square expects to earn up to $0.11 per share, and although that’s an increase from Q1’s numbers, analysts were estimating the company’s next quarter would see EPS double to $0.12.
Growth for the company is a big strong point, and one of the reasons I’m a fan of the stock is its simplicity and ability to make a big dent in how credit card processing is done.
Having been involved deeply in credit card processing for over two years, I know how expensive it is to process transactions and rent or buy terminals. People don’t often think twice about the cost and expect there is no real alternative, but Square gives vendors that option and the appeal of having a very easy and user-friendly terminal to accept payments with will win over a lot of people, especially with no expensive rental fees attached to the device.
Those are just a few reasons why Square has grown so well over the years. In its last fiscal year, gross sales were up 30% and in four years have more than tripled.
Year-to-date, Square’s share price has risen around 35% and in the past 12 months it has grown by more than 150%.
