Macquarie analyst Dan Dolev wrote Tuesday that his recent customer survey found a willingness on the part of Square Inc.'s Cash app users to increase instant-deposit pricing by 50%. The survey found that 60% of Cash users would be willing to pay more than 1.5%, the current fee, for the ability to instantly transfer their funds to a bank account. The average price users were willing to pay was 2.3%, Dolev said. "Raising Cash App Instant Deposit pricing from 1.0% to 1.5% in 2018 boosted revenue and helped propel the stock to ~$100," he wrote. "We estimate that a 50bps increase in Instant Deposit pricing could result in $250 million to $300 million or ~10% additional sales growth in 2021 versus consensus estimates." He rates Square's stock at outperform with a $105 target price. The stock is up about 1% in premarket trading Tuesday, and it's up 13% over the past three months as the S&P 500 has gained 6.7%. Read More...
Macquarie analyst Dan Dolev wrote Tuesday that his recent customer survey found a willingness on the part of Square Inc.’s Cash app users to increase instant-deposit pricing by 50%. The survey found that 60% of Cash users would be willing to pay more than 1.5%, the current fee, for the ability to instantly transfer their funds to a bank account. The average price users were willing to pay was 2.3%, Dolev said. “Raising Cash App Instant Deposit pricing from 1.0% to 1.5% in 2018 boosted revenue and helped propel the stock to ~$100,” he wrote. “We estimate that a 50bps increase in Instant Deposit pricing could result in $250 million to $300 million or ~10% additional sales growth in 2021 versus consensus estimates.” He rates Square’s stock at outperform with a $105 target price. The stock is up about 1% in premarket trading Tuesday, and it’s up 13% over the past three months as the S&P 500 has gained 6.7%.
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