Ahead of the company’s earnings call this week, Square’s stock fell 6 percent. According to TheStreet, financial services firm William Blair released a note on Monday (July 30) regarding the earnings, which are expected after the bell on Wednesday, Aug. 1.
William Blair currently has Square rated as perform, with analysts anticipating "51.5 percent adjusted revenue growth to $364 million ... and adjusted [earnings per share (EPS)] of 12 cents." They also "estimate payment volume growth of 30 percent, compared to 31 percent in the first quarter."
However, the firm is more cautious about Square's push into the bitcoin space.
"We are a bit nervous about the addition of bitcoin trading, as we are concerned about regulatory and reputation risk. If Square customers lose material amounts of money from trading bitcoin, it could harm the brand's value," wrote William Blair.
Last year, Square began allowing Square Cash mobile app users to make bitcoin purchases. In a statement, the company said it is exploring how the company can make the mobile app faster and easier to use by rolling out the ability to purchase bitcoin to a small number of its Square Cash customers.
“Given Square’s tendency to move judiciously into new technologies, we expect it will do the same with bitcoin purchases,” said Credit Suisse Analyst Paul Condra. “The upside could be significant if cryptocurrencies become more mainstream.”
In fact, just last month, it was reported that shares of Square had risen almost 50 percent, adding about $8 billion in market value since the company launched bitcoin trading last year. And one analyst is estimating that Square’s gross payment volume could reach $409 billion in 2026, or 4.1 percent of the total U.S. payment volume.
According to RBC Capital Markets Analyst Daniel Perlin, “Square’s integrated hardware, software and services solutions position the company to benefit from ongoing card acceptance penetration at smaller merchants, while gaining share against existing solutions that lag from a technological or efficiency basis.”