Square's Model Appears To Be Improving, Analysts Say

By Markets MarketWatch Pulse

As Twitter Inc. reportedly considers a sale, Chief Executive Jack Dorsey's other company, Square Inc. , appears to be improving, according to Pacific Crest analysts. The analysts said Thursday they believe Square Capital, the company's lending service, will not be affected by regulation in the short term and institutional investors have a positive view of the lending model. The analysts are expecting an earnings beat in the third quarter, with a small guidance raise for the fourth quarter. But the analysts lowered third and fourth quarter revenue estimates, based on Square Capital revenue yield and seasonality. The analysts remained sector weight and see a $12 to $13 fair value. Shares of Square have gained 27% in the past three months, compared to the S&P 500's gain of 2.6%.

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