Cumulative downloads of Square‘s Cash App surpassed PayPal‘s Venmo for the first time ever after Square’s service grew three times faster than its rival in July. Data from Sensor Tower and Nomura Instinet revealed that the Cash App’s cumulative downloads now total to 33.5 million, exceeding Venmo’s 32.9 million.
Taking over the top position should give Square’s shares a boost, said Nomura Instinet analyst Dan Dolev on Tuesday (Aug. 14), according to CNBC. He estimated that the app will contribute as much as $30 million to $40 million (2 percent to 3 percent) of adjusted net revenues this year. Square’s stock rose 3 percent after the opening bell, pushing shares to a record intraday high.
“If the Cash App continues to grow rapidly, the business could reach or even exceed $100 million in sales by 2020, even without deeper active user penetration,” Dolev said. “With impressive user growth and ongoing decoupling from bitcoin, we believe Square’s monetization efforts are increasingly bearing fruit.”
As a result, Dolev raised his revenue estimates for the company and adjusted his 12-month target higher to $86, suggesting an 18.8 percent upside over the next year. He also has a buy rating on shares of Square.
During the company’s most recent earnings call, Square’s Chief Financial Officer Sarah Friar told investors that the Cash App is consistently a top 30 app in the App Store. In the second quarter in the U.S., it was the number one finance app. In June 2018, Cash App customers spent $250 million with Cash Card, nearly tripling since December 2017 and representing $3 billion on an annualized basis.
Earlier this month, it was reported that Square’s adjusted second-quarter earnings came in at 13 cents a share on revenue of $815 million. That beat analysts’ forecasts of earnings per share (EPS) of 11 cents and revenue of $774.6 million. That’s 60 percent revenue growth year on year. Transaction-based revenue was up 30 percent year over year to $625.2 million during Q2, while gross payment volume came in at $21.4 billion — a 30 percent increase over 2017 at the same time.