Links to SQ 4th qtr shareholder letter and 10K

Investment Analysis Clubs Saul’s Investing Discussions
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https://squareup.com/about/investors

Net Revenue up 51% YOY, Adjusted Revenue up 64% YOY and Adjusted EBITDA up 97% YOY and Operating Expenses up 52% YOY.

Based on a quick look, numbers look good.

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Like it to go further down. Sold out at 65. Mistake. This one is a keeper as probably is shop.

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From the looks of it, SQ looks like a buy on dip, hold in 5 year and see what happens stock. It’s market cap being 32 billion makes it hard to “grow” more. But it might slowly trudge it’s way up to a higher value stock.

My only concern is recession and their high fees.

But I will continue holding and adding on the dips. If it dips to low 60’s I’m loading the boat.

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Hi -
I’m thankful to have found this board. I am still rapidly learning a lot about investing in my relatively young career (only a few years but learned a lot in the last 12 months). I do own Square, and a few of my thoughts - would love to hear what others think!

  • Earnings were good, not great. The gross payment volume was down a tick, along with revenue and adjusted revenue from prior quarter. Not sure if that is due to overall macro as a lot of retail was down in Q4 2018 in the market.

  • They seemed to really emphasize their ecosystem and Cash App. They’ve stressed ecosystem heavily over the last 3 to 4 conference calls; but it’s IMO where most of the value is in this business along their innovation. They had 144% YOY growth in services/subscriptions (if I recall correctly).

  • Cash App YOY has more than doubled in users. Hinted at they may have more ways to monetize this sometime down the road.

  • Square Card, which is a debit card for business owners to use, has been popular already, as many very small businesses don’t have a bank account. Square is focused on serving the underbanked.

  • Their bank license application is still in process. They can’t comment on it but look forward to continue to work with FDIC. I want to try to read between the lines and say this means it’s moving in the right direction.

  • Overall, I think it was a good quarter. I don’t think it was dramatically different than prior few. I think for those who are SQ bulls, they will remain. For those who question it, will still question it. I continue to like the company, and I regret not taking heavy profits near $100. But I also question if the stock price can continue to rise quickly as this is near a $30 billion market cap company.

  • So I will continue to hold, but if I do find a smaller/rapidly growing company that I would have strong conviction in, I may consider jumping ship (I have a lot to read on this board, to learn about the great companies discussed here – I sadly missed the boat on TTD). As Square has 51% YOY revenue growth and 64% adjusted revenue growth YOY, few companies can put up those numbers, especially at SQ’s market cap size.

-Market just punished SQ as it’s priced perfectly for earnings, and they lowered Q1 estimates, but not for 2019 whole year.

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