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)
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