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Square stock smashes new highs on Credit Karma Tax acquisition

Square stock smashes new highs on Credit Karma Tax acquisition

Square (NYSE: SQ) stock price rallied to a new all-time high of $212 after the company announced the acquisition of Credit Karma tax business, in line with the strategy of expanding financial tools for its users.

Its financial tools include cash cards, peer-to-peer payments, direct deposit, and investment opportunities in traditional stocks and bitcoin. The market pundits and investors have also been showing confidence in robust revenue and earnings growth in the past few quarters. The square stock price soared almost 20% in the last month alone, extending the twelve months gains to 210%.

SQ Square, Inc. daily Stock Chart
Square stock performance. Finviz chart.

Analyst’s bullish calls support gains

The market pundits appear bullish on the future fundamentals of Cash App. Mizuho analyst Dan Dolev has provided a price target of $300 as the analyst anticipates gross profit in the range of $7.7 billion in fiscal 2023 from $2.8 billion this year. The analyst also expects the Cash App to double its user base in the next few years.  

BTIG analyst Mark Palmer has set a buy rating for Square stock after the company topped revenue and user’s additions estimates for the September quarter.

“We believe the success of Cash App opens the door for SQ to expand from a payment system to a much more comprehensive platform offering a wide array of services in the manner of China’s Alipay,” Palmer said.

Financial numbers are backing Square stock gains

Square has topped third-quarter revenue estimates by $950 million as revenue of $3.03 billion grew 138% from the past year period. Its second-quarter revenue stood around $1.9 billion. The robust revenue growth helped the company to report $181 million in adjusted EBITDA, up from $98 million in the previous quarter.

The company expects to extend the high double-digit growth momentum into the December quarter and beyond on the back of new product introductions and consumer’s shift towards digital payments.  

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