Shares of Square (SQ -4.25%) jumped on Wednesday, following bullish analyst commentary. As of 2:20 p.m. EDT, the financial services company's stock price was up more than 7%.
Early this morning, Keefe, Bruyette & Woods analyst Steven Kwok raised his rating on Square's shares from market perform to outperform and reiterated his $250 price forecast. Kwok's price target represents potential gains to shareholders of roughly 10% from the current price near $227.
Kwok praised the thriving ecosystems Square is building around its Seller and Cash App platforms. He also highlighted the growth opportunities the company enjoys with its recent acquisitions of Credit Karma Tax and Tidal, as well as its new banking charter.
Square is steadily broadening the suite of products and services it offers to its merchant customers. What began as a quick and easy way to accept debit and credit card payments now includes tools that assist sellers with online store creation, social media management, scheduling, payroll, and email marketing, as well as a host of other e-commerce solutions.
Moreover, Square is building Cash App into a mobile payment powerhouse. The company's Bitcoin (BTC 0.36%) trading services are proving immensely popular with Cash App users. Square produced more than $1.7 billion of Bitcoin revenue and $41 million of Bitcoin gross profit in the fourth quarter, representing a roughly tenfold and 13-fold year-over-year increase, respectively.
Square's move to acquire music and entertainment platform Tidal for $297 million is also intriguing. Analysts say the deal will bolster Square's presence in the music and events industry, while expanding its social commerce capabilities.
For all of these reasons, Square's stock could easily reach and exceed Kwok's $250 price target -- and perhaps sooner than many investors expect.