Summary: Watch
This is a step-by-step stock review to answer the question, is Square (SQ) stock a good buy?
This article will teach you how to use the 4Ms of investing. This will be a detailed walkthrough to show you how the 4Ms work and why they are important. If you are interested, you can log into Tykr to use the 4M Confidence Booster (Powered by OpenAI) which will allow you to complete a 4M Analysis in less than 60 seconds.
What are the 4Ms?
- MOS (Margin of Safety) – The MOS is the math part of investing which includes the Summary, Score, and MOS (Margin of Safety).
- Meaning – The meaning is the business model and how scalable the revenue streams are.
- Moat – The moat is how the business compares to other companies in the same Sector and Industry.
- Management – The management is the track record of the CEO.
What 4M score are we going for?
- 80-100 = High confidence – Yay! You should have high confidence buying this stock. It passes all 4M!
- 60-79 = Moderate confidence – Alert! There may be better stocks in the market. Only buy this stock if you truly believe the company will improve!
- 0-59 = Low confidence – Warning! There are better stocks in the market. Due to the low score, you should consider looking at other stocks.
Table of Contents
The following links will direct you to key topics to help answer the question, is Square (SQ) stock a good buy?
1. Square (SQ) Company History
When investing in stocks, it’s important to know the company’s history. This helps us understand the various revenue streams, if they acquired other companies, how they grew through difficult times, and how they separated themselves from the competition.
- Founded in 2009 by Jack Dorsey and Jim McKelvey, Square revolutionized payment processing.
- Inspiration: Created to help small businesses accept credit card payments via mobile devices.
- First Product: Launched a simple, portable card reader in 2010.
- Rapid Growth: Expanded services to include point-of-sale systems, online payments, and business financing.
- IPO Milestone: Went public in 2015, listed on NYSE under the ticker SQ.
- Global Reach: Operates in multiple countries, serving millions of businesses worldwide.
- Innovations: Introduced Cash App, a popular peer-to-peer payment service, and Square Capital for business loans.
- Ecosystem Expansion: Developed software and hardware solutions for retail, restaurants, and e-commerce.
- Acquisitions: Acquired companies like Weebly and Tidal to diversify services.
- Rebranding: Renamed corporate entity to Block, Inc. in 2021, reflecting broader focus beyond payments.
- Awards and Recognition: Frequently honored for innovation and customer service in fintech.
- Community Impact: Supports small businesses and entrepreneurs through various initiatives and resources.
- Mission: Empower businesses and individuals to succeed in the economy with integrated, easy-to-use financial tools.
- Future Vision: Continue innovating to provide comprehensive financial services for a digital-first world.
2. MOS (Margin of Safety)
When investing in a company, the first step is to look at the financials. Fortunately, Tykr does this for us automatically. The higher the score, the stronger the financials and the safer the investment. The higher the MOS, the higher the potential returns you can make.
- Summary: watch
- Score: 56/100
- MOS: 1%
To see the most up-to-date Summary, Score, and MOS, please log into Tykr.
3. Meaning
When investing in a company, it’s important to know how a company makes money. A mature business model has multiple streams of revenue which allow the company to weather downturns in the economy.
Here is how Square (SQ) makes money:
- Transaction Fees: Square makes money by charging a percentage fee for every payment transaction processed through its platform.
- Hardware Sales: Sells point-of-sale (POS) hardware like card readers, terminals, and registers to businesses.
- Subscription Services: Offers subscription-based services such as Square for Retail, Square for Restaurants, and Square Appointments with advanced features.
- Square Capital: Provides business loans and earns money from the interest and fees on these loans.
- Cash App: Generates revenue from Cash App through transaction fees, instant transfer fees, and Bitcoin trading fees.
- E-commerce Solutions: Charges fees for online payment processing and e-commerce tools through platforms like Square Online.
- Software Services: Offers paid software services for inventory management, employee management, and customer loyalty programs.
- Financial Services: Earns revenue from financial services like business banking, payroll, and tax preparation.
- Partnerships: Gains revenue through strategic partnerships and integrations with other business tools and platforms.
- Market Expansion: Increases revenue by expanding into new markets and launching innovative financial products and services.
4. Moat
When investing in a company, it’s important to understand how a company ranks against other companies in the same sector and industry. Based on the Score, here is how Square (SQ) stacks up against other companies.
To see the most up-to-date Summary, Score, and MOS and each stock, please log into Tykr.
5. Management
When investing in a company, it’s important to understand who the CEO is, what they have accomplished in the past, and how they have helped this company grow. Good leaders typically have stronger cultures, less turnover, and better returns in the stock market.
- Founding Square: Jack Dorsey co-founded Square in 2009, providing small businesses with easy-to-use payment solutions.
- Square Reader: He introduced the Square Reader, a small device that turns mobile devices into credit card readers, revolutionizing payment processing.
- Square Cash App: Dorsey launched Cash App, a mobile payment service that allowed peer-to-peer money transfers, becoming a popular digital wallet.
- IPO Success: He successfully led Square through its initial public offering (IPO) in 2015, significantly increasing the company’s valuation and market presence.
- Expanding Services: Dorsey expanded Square’s offerings to include point-of-sale systems, payroll services, and small business loans, creating a comprehensive financial ecosystem.
- Global Expansion: He spearheaded Square’s international growth, making its services available in multiple countries.
- Empowering Small Businesses: Dorsey focused on empowering small businesses by providing accessible financial tools, contributing to the growth of many small enterprises.
- Innovating Fintech: He drove innovation in the financial technology sector, positioning Square as a leader in fintech with a strong focus on user experience and simplicity.
6. 4M Score
All of our homework on this company leads up to the 4M Score. A lot of investors only look at the numbers. Yes, it’s important to look at the first M (MOS) which is the math part of investing but it’s also important to look past the numbers and also look at the Meaning, Moat, and Management. If all 4Ms pass, we should have high confidence in buying this stock.
What 4M score are we going for?
- 80-100 = High confidence – Yay! You should have high confidence buying this stock. It passes all 4M!
- 60-79 = Moderate confidence – Alert! There may be better stocks in the market. Only buy this stock if you truly believe the company will improve!
- 0-59 = Low confidence – Warning! There are better stocks in the market. Due to the low score, you should consider looking at other stocks.
👉 The 4M Score of Square (SQ) is ?
To see the most up-to-date 4M Score, please log into Tykr.
7. Is Square (SQ) stock a good buy?
Some of the top questions investors can have is Square (SQ) stock a good buy or should I buy Square (SQ)?
Investing in Square offers a compelling opportunity in the fintech sector. As a leader in digital payments and financial services, Square has revolutionized how businesses manage transactions with its Square Reader and Cash App. Under CEO Jack Dorsey’s leadership, the company has expanded its ecosystem to include point-of-sale systems, payroll services, and small business loans, catering to a broad range of financial needs.
Square’s innovative approach and focus on small businesses have driven significant growth and market penetration. The company’s strong financial performance, marked by consistent revenue growth and expanding user base, underscores its resilience and adaptability in a competitive market.
However, potential investors should consider factors such as market volatility, regulatory changes, and competition from established financial institutions. Despite these risks, Square’s disruptive technology, diversified revenue streams, and commitment to financial inclusion make it an appealing investment for those bullish on the future of digital payments and financial services.
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To truly know if Square is a good stock to buy or sell, we recommend you log into Tykr. Within seconds you can see the Summary, Score, MOS, and 4M Score.
If you found this stock review interesting, you may also like this review on Fortinet.