Square, Inc. develops and provides point-of-sale software worldwide. It provides Square Register, a point-of-sale system that takes care of digital receipts, inventory, and sales reports, as well as provides analytics and feedback. The company was founded in 2009 and is based in San Francisco, California.
SQ Price Forecast Based on DCF Valuation
DCF Fair Value Target:
We started the process of determining a valid price forecast for Square Inc with a discounted cash flow analysis -- the results of which can be found in the table below. To summarize, we found that Square Inc ranked in the 3th percentile in terms of potential gain offered. Our DCF analysis suggests the stock is overvalued by about 99%. In terms of the factors that were most noteworthy in this DCF analysis for SQ, they are:
The company's balance sheet shows it gets 96% of its capital from equity, and 4% of its capital from debt. Its equity weight surpasses that of 77.78% of free cash flow generating stocks in the Technology sector.
The business' balance sheet reveals debt to be 4% of the company's capital (with equity being the remaining amount). Approximately just 11.5% of US stocks with free cash flow have a lower reliance on debt in their capital structure.
SQ's estimated cost of debt, based largely on its market capitalization and its interest coverage ratio, is 2%; for context, that number is higher than 46.79% of tickers in our DCF set.
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
For other companies in the Technology that have a similar discounted cashflow valuation profile (and ensuing price forecasts) as SQ, try CCRC, MU, TCX, UPLD, and WDC.