Square bear sees 33% downside

|By:, SA News Editor

Ever since Square (NYSE:SQ) announced Bitcoin transactions through its Cash App, its stock price has been moving inline with the crypto, notes BTIG's Mark Palmer.

It's surprising, says Palmer, to see such a strong correlation given how small of a contribution Cash App/Bitcoin offering will make to Square's bottom line in the short-to-medium term.

Palmer reiterates his Sell rating, reminding that his bearishness is not so much about the Bitcoin platform, but instead the current fancy valuation - 26x consensus 2020 EBITDA. His $30 price target suggests 33% downside.

Square is scheduled to report Q4 results on Tuesday, February 27 after the market close.

Previously: Square another Amazon or Google? Shares up 3.8% (Jan. 19)

Subscribe for full text news in your inbox