Square (SQ -1.57%) has certainly been a home run for early investors, returning a total of 1,870% since its late-2015 IPO. However, in this Fool Live video clip, recorded on July 9, Fool.com contributors Brian Withers and Matt Frankel, CFP, discuss one big reason it could still have tons of upside ahead.
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Brian Withers: Square is a very domestic business. I look at proven globalness, Square only gets 6% of its revenue from outside of North America. That's a huge opportunity, but it's also a hill to climb as to getting into new markets is always takes considerably more effort than companies estimate for and even for companies as virtual as Square. There's certainly lots of local laws that you have to apply for and certainly with payments in small business, there's definitely some localization that has to happen for Square. It's one of my largest holdings. I was looking back at where it landed, it's in my top five I think. But yeah, I love Square, but if you look at Shopify's (SHOP -2.37%) balance sheet, cash flow, all that stuff next to Square's, it's night and day.
Matt Frankel: I would actually argue the other side of the international thing. I think the fact that Square has gotten to $100 billion market cap without any significant global business is really awesome and not only that, they've done it through mostly brick-and-mortar retail. I think omni-channel is a gigantic opportunity. They already have the physical stores, so as more of them migrate their business online, it's a natural fit, Square online store was just launched about a year ago. I think that's a massive untapped opportunity. Like you said, only 6% of their revenue is international. If they replicate their U.S. success at even like one or two other countries, that's huge. My cost basis in Square is about $11, so I considered it a value investment at the time. Now, I look at their revenue based on what I paid for that revenue and it's still a pretty good value but I think Square could be a $1,000 stock within the next decade.
