Square (SQ) - Get Square, Inc. Class A Report was higher Wednesday after the stock was named a top pick by analyst Chris Brendler at Buckingham Research, and analysts at Bernstein initiated coverage of the payments processor with a market perform rating.
Square rose 2.34% to $77.37.
"Square is currently testing a marketplaces solution for Eventbrite and with over $4 billion in annual volume, we expect a material boost to total-payment-volume [TPV] growth," Brendler wrote.
Square will handle Eventbrite's U.S. transactions, which total about 75% of Eventbrite's business.
Square was initiated Wednesday with a market perform rating by analyst Harshita Rawat at Bernstein. Rawat said Square is a high-growth earnings compounder and added that investors concerns of "catastrophic risks" are "overblown."
The analyst did say, however, that the stock still looks expensive, trading at 14 times estimates for enterprise value over revenue. She set an $80 target price on the stock.
"While we are constructive on Square's ability to drive above market growth, we see less likelihood of material positive revisions (historically the catalyst for stock performance) given law of large numbers, lack of two-sided network (driver of competitive moat in payments), fierce competition (in up-market & e-commerce), uncertainty regarding long-term sustainability of Instant Deposit, and already aggressive estimates for Cash App," Rawat wrote.
Square will release fiscal first-quarter results on May 1.
More than 30 analysts surveyed by FactSet give Square an average overweight rating and long-term price target of $83.73. The stock has 15 buys, 15 holds, three sells and one underweight, according to FactSet.
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