Square (NYSE:SQ) is a seriously undervalued stock, according to Mizuho Securities prognosticator Dan Dolev. On Monday, Dolev lifted his price target on the stock to a "street high" of $380; his previous level was $300. If achieved, the new level would represent nearly 42% upside to Square's most recent closing stock price.

Meanwhile, Dolev is maintaining his buy recommendation on the shares.

Cash emanating from a smartphone held by a guy.

Image source: Getty Images.

He believes that they could very well blast higher than his new, greatly enhanced price target.

"Our terminal value [discounted cash flow] analysis shows by 2031, Cash App and Seller GP may exceed $30 billion and $6 billon, respectively. Our base case implies share price of $380; bull case implies over $650," he wrote in an analyst note.

Seller is a core app in Square's ever-growing ecosystem of merchant-related offerings. The company continues to expand from its relatively humble beginnings as a provider of point-of-sale terminal services. Cash App is its hugely successful peer-to-peer payment service.

With the steep recent declines in coronavirus cases and deaths, it's entirely realistic to believe that the company's take for Seller will improve dramatically. Cash App, meanwhile, should continue to be a popular option for transactions between individuals. Dolev is particularly taken with the latter, which he feels could hit a three-year compound annual growth rate (CAGR) of around 200%.

The analyst also opined that Square "is barely scraping its full potential," given other potentially lucrative business lines. He pointed to corners of finance such as cryptocurrencies and equity trading as potentially strong motors of growth for the company.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.