Square's competitors are 'stuck in the past' when it comes to bitcoin payments
- Square was one of the first payments companies to accept bitcoin - something CEO Jack Dorsey doubled down on in the company's earnings call this week.
- "I've not heard discussions about bitcoin from pretty much any of its competitors," one analyst told Business Insider.
- Dan Dolev is one of the most bullish Square analysts on the Street with a $64 price target.
Square, the payments company run by Twitter CEO Jack Dorsey, is miles ahead of its competitors when it comes to accepting cryptocurrency payments, according to one Wall Street analyst.
"Square has been the pioneer of this field," Nomura analyst Dan Dolev said in an interview with Business Insider. "I've not heard discussions about bitcoin from pretty much any of its competitors."
CEO Jack Dorsey on Tuesday told analysts on the company's fourth quarter earnings call that "bitcoin, for [Square], is not stopping at buying and selling. We do believe that this is a transformational technology for our industry and we want to learn as quickly as possible."
For now, bitcoin isn't adding much to Square's bottom line, though the payments firm is still beating Wall Street's expectations. The company said it earned an adjusted $0.08 per share in the fourth quarter, beating the expected $0.067. Revenues of $282 million also topped the Street's estimates.
"It's also smart on Square's side because they're first to the debate," Dolev explained to Business Insider. "It kind of epitomizes, without naming names here, that some of their competitors are stuck in the past whereas Square is forward thinking."
Square could disrupt legacy financial services companies in areas beyond payments as well. That's why Dolev has a $64 price target for the stock - 40% above the stock's $44 price Thursday morning.
"We say Square are the Amazon of payments because they are on their way to becoming a much bigger part of the overall financial ecosystem than they are today," Dolev said. "Why can't they disrupt some of the legacy HR and payroll providers? It's just software. Once you're sitting there and already own the point-of-sale system, you can bundle it with services that are helping businesses run on a day by day basis."
Shares of Square are up 160% in the past year.
