Don’t copying manch. I am looking at SQ and NOW. Please post your findings, pretty busy, no time to do any research other than lazing around.
The more I read about Square, the more I like it…
Buy or no buy before May 2?
It is gonna be stresful.
What do you like?
Square is aggressively expanding into services with subscription revenue. It’s not just a payment processor anymore. It’s morphing into an operating system for businesses, both online and offline.
It now does: mobile payment (like Venmo), food delivery, catering, ecommerse websites, banks, loans, etc… It keeps aggressively widening its net.
I am thinking of buying half my initial investment before earnings, and half after. Need to sleep on it. It’s a buy for me for sure.
Welcome to the club.
I decided to initiate some position on ghg.
SHOP is up over 5% ahead of earnings tomorrow. Clearly, people think it’s going to be a good one. Big volume on the weekly $145 and $150 calls which are quite a bit OOM.
A good day to enter into Sqaure:
Square targeted by Citron; shares slip nearly 3%
Citron is losing its touch if it only sends a stock down 3%. Maybe people are finally ignoring them.
Square has climbed back to within 1%. Citron is losing it.
Earnings is a day or two away.
Shop went bust, i mean went back to april 25th prices.
I’ll read the earnings call. The headline numbers were great, and they raised guidance.
Yeah based on some write up i read, it was because of deepened losses. Please report back.
From what I see, some people are looking at GAAP earnings and others are using non-GAAP. Non-GAAP was a profit. The main difference is $17.9M of stock comp which is included in GAAP, but it’s excluded from non-GAAP. GAAP was a loss of $15.2M vs non-GAAP profit of $4.2M. Add payroll taxes and that’s the rest of the delta. Almost every tech company reports non-GAAP numbers, because stock comp isn’t a cash expense.
This is a huge deal.
Both revenue and margin are decelerating, doesn’t justify the high valuation. That is, not good enough.
Gross margin improved and so did net margin. Revenue grew 68% which was above expectations of 58%. Gross profit was up 71% which is higher than revenue (eg, gross margin improved).
I seriously think the biggest issue is journalist are idiots. Most of the early articles were incorrectly reporting the numbers. They were comparing the GAAP results to non-GAAP estimates. The non-GAAP was $0.04/share profit vs. estimates of $0.05/share loss. That’s a massive beat. There are morons comparing the GAAP $0.16/share loss to the $0.05/share non-GAAP estimate. Later in the day, more articles are reporting it correctly.
On the call, they commented they’ve been hiring some top talent, and that talent is expensive. That’s why the stock comp is higher creating the delta between GAAP and non-GAAP earnings. The tech world is reported in non-GAAP, because stock comp is not a cash expense.
Why do they need so much top talents? New direction? New products? Too much stock comp will haunt the stock… eventually it will catch up with valuation. Increasingly I’m worry that these companies keep paying stratospheric dollars for talents. Are their clients real consumers like us or some other startups like themselves?
Are clients of SHOP mostly established companies (small to big) or mostly startups? If mostly startups, I’m totally worried… once angels become nasty, they are not able to pay SHOP… That is, SHOP would crash along with those companies.