Analyst who had a short thesis has upgraded Square.
I was doing some vacationing last week, and visited many places using Square.
The ease of use and convenience for customers stood out to me.
One place in particular, Minnehaha Park in the Twin Cities, stood out. There is a seafood restaurant and beer garden, always 30-40 people deep in line. By using Square, they are increasing the speed of checkout.
You never hand your card to the cashier, you slide it into the Square terminal yourself, have an easy to read display showing the charges where you can choose tip, receipt preference, etc. And the card is run in a few seconds and you are on your way with your Fulton Lonely Blonde. Just a great customer experience.
There is a new hotel in Santa Monica called Prosper. 5 star high end.
I was taking with staff in restaurant the other evening. They were having a very difficult time with their payment system. Apparently their POS system was not cooperating with their payment system which is Square. She wasn’t sure what the next step was in correcting the issues.
The upgrade today was a raise to “market perform”, not exactly glowing. I used to pop to cut my holding in half. Looking to redeploy that cash into one of the other Saas names.
I’ve been upping my SQ holdings. I’m glad to hear feedback from personal anecdotes, not sure I would make investment decisions based on one second hand account, though.
I went through the numbers recently and the only troubling thing I see is gross payment volume didn’t grow last qtr.
There is a solid improvement trend in gross margin, it’s up to 43%. SQ makes incredible margin by giving businesses access to their money fast within the SQ network that gives a strong network effect. Also sticky once implemented.
Revenues continue to grow.
The company delivers new products and they seem to be well received. Next qtr call should answer a lot of questions about the popularity of the invoice system and the success of the platform concept for larger clients. As weird as Dorsey is, you have to give hime credit for innovation and that gives this stock good optionality. The payment TAM is so big, I don’t see how they could ever reach saturation.
To me there is just a lot of good things happening with the company and hits a lot of the right notes for a potentially good investment.
Luck favors the prepared. SQ has set up the conditions for a nice upside surprise and/or continued growth in revenue with the platform and product launchpad.
SHOP might eventually eat their lunch. There is competition. I don’t think it’s winner take all and the market is massive so probably room for both.