Square SQ is so high and overvalued, it is ready for a serious short. SQ DCF valuation assuming growth rates of 50% sliding down to 7.5% over 10 year yields a value per share of $45. This assumes SQ will get a large portion of the world's payment system. However, there are many competitors to SQ - VISA, MasterCard and PayPal for example. I don't think SQ will be able to keep up the high growth rates when faced with these competitors. SQ's valuation could be a lot less than $45 per share. Technically, SQ has broken a major up trendline and is in a wedge. The RSI, ROC and MACD are all pointing to a downwards move. I suspect this stock will drop rapidly from here. Note it doesn't have any earnings yet, its P/E ratio can not be calculated because of negative earnings. If SQ can not break even soon and growth tapers, expect a dramatic fall in share price. The drop could start soon when it announces its next quarter earnings. If next quarter earnings are negative again, watch out, it's going to fall.
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Well, who missed the tanking of SQ after their Jun quarter profit announcement? SQs sales are growing but they still have negative earnings. Over the last six months, SQ has a loss widening out to $-0.11 per share. This stock has turned south in a big way and I think it's going down to $45 at least. It may fall further if the overall market tanks hard too. SQ stock may settle for a few days after its recent fall. On any strength, short it and wait for the next drop.