Fintech payment company Square (SQ) has been a big pandemic winner. Cashless transactions are on the rise, and the company’s touchless technology has done a lot to avoid the physical exchange of cash, on top of its other features.
So it’s no surprise that the company smashed its latest earnings report, bringing in $5.06 billion in revenue against expectations of $3.3 billion. The company even reported making $3.5 billion in Bitcoin transactions, up 10-fold from a year ago when it was just getting started.
With revenue growth of 140 percent, and with the company reporting a $75 million gain on its own modest Bitcoin holdings, shares look like they could get on a growth track again here.
Coming off a high of $283 per share, the recent price of $220 is a bearish 22 percent drop from the high. With strong earnings bringing down the company’s financial metrics from the stratosphere, shares could be poised to rally again.
Action to take: Investors may like shares here, as the company is dominating in the cashless payments space and becoming a dominator. Square is still rapidly growing, so there’s no dividend payment yet.
For traders, the September $250 calls look attractive as a rebound play. Last trading for about $16, the options stand a good chance of moving in-the-money in the coming weeks should shares post a strong rebound. That could translate to some quick high double-digit profits.
Disclosure: The author of this article has positions in the stock mentioned here, and may make additional trades on this company after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.