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What: Shares of Square (NYSE:SQ) fell 33% in the month of January, according to S&P Capital IQ data as investors continued to question the company's ability to generate profits.

So what: Early in the month, analyst Gil Luria at Wedbush Securities lowered the company's price target from $12 to $11 per share, causing the stock to sell off. But shares were also hit hard by the larger concern that the company won't be able to translate its credit card business into positive cash flow. 

There was a little positive news during the month as well -- BlackRock disclosed a 5% stake in the company. That should give a little confidence that at least one major investor sees value in the business. 

Now what: Square is past the IPO honeymoon phase and now needs to prove it can make money. Even when it reports fourth quarter earnings on March 9, analysts are expecting a loss of $0.13 per share -- and for 2016 they're projecting a $0.23 loss per share.

Management needs to put the company on a clear path to profitability or boost growth quickly enough to justify even its current valuation to investors. For now, this is a stock to watch from a distance until Square can show it has staying power in the highly competitive payment space.

Travis Hoium has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.