In the wake of reports about the Pfizer vaccine, digital payment provider Square Inc. (SQ) dropped earlier in the week. However the stock later returned to growth, since the success of Square does not rely on the pandemic, but is linked to general market trends.
Before the COVID-19 pandemic, Square increased its consumer base, but constraints on social interaction and traction in the e-Commerce sector accelerated the growth of some areas of the business. This is why many investors assumed that the pandemic was directly affecting Square’s growth. Thus, Square’s stocks also dropped after the news about the vaccine was released.
Currently, independent of COVID-19, Square has long-term growth prospects, thanks to Cash App, the company is becoming a major player in the cash payment applications market. Furthermore this app helps the users you to pay for the work of temporary or remote employees easily.
According to some Wall Street analysts, such as Mizuho, one of the key drivers of Square’s growth would be the Cash App. By 2023, as the company continues to grow its market share, the number of Cash App users is expected to rise from the current 30 million to 60 million. In app delivery, small and medium-sized enterprises play a positive role. Overall, Mizuho estimates that there is the opportunity for the Cash App division to quadruple gross profit.
Square is now widening its loan offer as its loans will now be used not only by developers, but also by people who need a small amount of cash urgently. Recently, the payment system has also provided users with shares to invest in. Thus the Square ecosystem is developing rapidly, the portfolio of services is diversifying, and the client base is increasing. Many of these patterns in the company’s market were noticed well before the pandemic, and are likely to continue even after the current restrictions are lifted.
Square Inc. (SQ) stock was worth $179.16 at close on November 12 with a market cap of $81.39 billion.