Shares of Square Inc. rose 3.8% in premarket trading Friday after analysts at Instinet raised their target price to $64, by far the highest among Wall Street analysts tracked by FactSet. The analysts, led by Dan Dolev, believe that an inflection in GPV growth will help Square keep transaction yield stable even as large sellers become a more important part of the business. They also see Square’s margins expanding as the company’s Square Capital lending business expands and as the company generates continued momentum for its software offerings. Dolev’s price target suggests more than 50% upside from current levels, though he wrote that “analogous to Amazon or Google in their early days, little of this upside is evident using conventional valuation methodologies.” Square shares are up 173% over the past 12 months, while the S&P 500 Index is up 24% in that time.
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