Simple back of the envelope valuation on $SQ near-term:
Net revenues this year should be around $8-9 bn. By 2025 we should see ~$16.5 bn.
Operating margins at scale should approach 40%; let's assume 34%.
Diluted shares ~632m by then (incl. AfterPay dilution)
...
Net revenues this year should be around $8-9 bn. By 2025 we should see ~$16.5 bn.
Operating margins at scale should approach 40%; let's assume 34%.
Diluted shares ~632m by then (incl. AfterPay dilution)
...
Business should still be growing fast at that point and will likely trade at a V/MA multiple, say 30x earnings.
EPS ~7 per share, $223 stock price, 16% IRR from here.
Note that if you go further, IRR tends to increase.
Second note: When Sarah Friar was CFO, guidance was...
EPS ~7 per share, $223 stock price, 16% IRR from here.
Note that if you go further, IRR tends to increase.
Second note: When Sarah Friar was CFO, guidance was...
...for EBITDA margins of around 38%.
Few remember this at this point and Amrita hasn't given similar guidance since, but given the business line SQ is in, this is not unreasonable (at all).
Op margin here benefits from addition of AfterPay gross profits (from the proxy).
Few remember this at this point and Amrita hasn't given similar guidance since, but given the business line SQ is in, this is not unreasonable (at all).
Op margin here benefits from addition of AfterPay gross profits (from the proxy).
Final note: my "net revenue" EXCLUDES bitcoin.
Bitcoin is just an engagement tool. Huge revenues, almost zero gross profit, so excluded from valuation.
Bitcoin is just an engagement tool. Huge revenues, almost zero gross profit, so excluded from valuation.
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