Upgraded: Square Inc. (SQ) Becomes an Oversold Opportunity


 
 
09:39 10/12/2018

Shares of Square Inc. SQ  were slammed in recent days.

In fact, since early October 2018, the stock fell from $100 to $65 a share.

All thanks to a tech-routing, news that CFO Sarah Friar is stepping down, and news that CEO Jack Dorsey sold over 103,000 shares in early October.

But the sell-off was a bit too far, especially given its mind-boggling growth.

Second quarter revenue growth was up 48% year over year – and represents the fifth straight quarter of accelerating revenue growth. And there's still plenty of growth ahead that could fuel hefty revenue streams and profit growth for years to come. In fact, the company believes it can grow revenue by 20% to 25% a year with margins of 35% to 40%.

Plus, consider this. There are millions of small- and mid-sized businesses just in the U.S., which generate a total of $6 trillion in revenue. Even better, the company believes it can capture a good deal of the international market, too, which is five times bigger than the U.S. markets.

Analysts are taking advantage of the pullback, too.

Canaccord Genuity for example just upgraded SQ to a Buy from a Hold, noting they had “been on the wrong side of Square stock for some time,” as noted by Barron’s. The firms also noted it sees a long-term opportunity given Square’s status as a “truly disruptive company.”

Technically, the stock has bottomed out.



The stock is incredibly oversold. In fact, it hasn’t been this oversold in quite some time.

Not only is it outside its lower Bollinger Band (2,20), RSI is beginning to pivot from below its 30-line. MACD is historically oversold. Williams’ %R is below its 80-line. The last time RSI and W%R were this low, the stock exploded from just under $10 to $100.

In our opinion, Square is an oversold opportunity at current prices.

We believe it could make a quick return back to $100, immediate-term.


This article has been provided by a Chasing Markets contributor. All content submitted by this author represent their personal opinions, and should be considered as such for entertainment purpose only. All opinions expressed are those of the writer, and may not necessarily represent fact, opinions, or bias of Chasing Markets.
Most Read