Square-parent Block stands out from other financial technology, or fintech, stocks with its "one-stop-shop" payment network, said one Wall Street analyst who upgraded SQ stock to buy on Thursday.
"SQ remains uniquely positioned to achieve the 'holy grail' of creating a one-stop-shop network by connecting the point-of-sale, Cash App and buy now, pay later," Mizuho Securities analyst Dan Dolev said in a note to clients.
SQ stock climbed 1.4% to close at 75.09 on the stock market today.
The Square consumer Cash App helps individuals manage money, buy stocks and cryptocurrency, and more. Cash App has 47 million monthly active users
Block acquired consumer lending firm Afterpay in 2022. It competes in the buy now, pay later market. This market offers consumer installment payment plans.
SQ Stock: Cash App Growth
"Our concerns over sustainability of Cash App revenue remain," Dolev added. "However, we applaud management's recent commitment to cost-containment."
In addition, Square management recently outlined a new long-term investment framework, which will put the company on the road to higher quality earnings under GAAP (generally accepted accounting principles) accounting rules.
Square stock has gained 19% in 2023 after tumbling 61% last year. Square's Relative Strength Rating stands at 80 out of a best-possible 99, according to IBD Stock Checkup. The best stocks tend to have an 80 or better RS Rating.
In its core business, SQ stock aims to build a two-sided digital payments ecosystem, with products designed for both merchant sellers and consumer buyers.
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