Square’s stock is definitely an exciting, trending growth story. As a payment service provider in the corporate and private customer segment, the starting position is great, with sales recently exceeding $ 3 billion per quarter. That is really a stunner with a growth rate that is now even three-digit.
The management of Square also says that you are only scratching the surface of what is possible in the long term. The CFO also said that only 3% of its own addressable market has been taken. That could really have a lot of potential.
Now Square may ignite the turbo as it grows and could pull into the fast lane. Let’s take a look below to see what. As well as what that could mean for Foolish investors.
Square launcht die Financial Services
As the management of Square has now announced, Square Financial Services will in future be another piece of the mosaic in the context of the growth story. Wait a minute, Financial Services …? If you are a little confused right now: No. The payment service provider has been active in the fintech segment before and will remain so. However, this new division is really groundbreaking.
Square Financial Services will operate as a corporate bank in the future. The aim of this approach is to provide affiliate merchants with credit. This means that in future the payment service provider will no longer be a mere payment service provider that processes payments or bundles them in an app. No, he has a banking license and is entering the credit market. This is really an awesome moment in this exciting growth opportunity.
Square will also sell some of the loans it has taken out to third-party providers in order to minimize its own balance sheet risk. Nevertheless, the approach is lucrative to significantly expand your own business model. That could contain entirely new growth potential.
The management expands the ecosystem!
As we can see with a look at this corporate news, Square is igniting the next growth turbo. Loans in times of COVID-19 can be an important feature to boost growth. However, it’s not just timing that is happy.
Square also has a vast ecosystem of retailers and affiliated partners. This shows that the range of financial services could be large right from the start. Success may therefore be inevitable.
Also, taking another step back, we can see that the ecosystem behind Square stock is being consistently expanded. That’s what it’s all about in the long term: The payment service provider is working on an exciting future with competitive advantages. That means the success story doesn’t have to end for a long time.
Is Square stock a buy now?
On the other hand, whether the Square share is a buy now, that should be answered by Foolish investors for themselves. In any case, following this announcement, the share certificates have climbed a further 6.2% to EUR 211. With a market value of approximately $ 114.6 billion, the company is no longer really small.
Nevertheless: As we can see, the payment service provider Square is targeting the overall market and, according to its own assessment, is only just scratching the surface. In the long term, that could still mean a lot of potential.
The post be careful, fool! With this, Square now wants to be in the fast lane in terms of growth! appeared first on The Motley Fool Germany.
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Vincent owns shares in Square. The Motley Fool owns shares of and recommends Square.
Motley Fool Deutschland 2021
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