The popular acronym for large-cap tech stocks could soon have a new ring to it.
Square Inc. should be the newest member of the FANG complex, Nomura Instinet wrote in a note to clients Tuesday, highlighting the fintech firm’s “buoyant” payment volume as well as its revenue and marketing trends. The analyst, who has a buy rating on San Francisco-based Square, raised his price by nearly 50 percent to a Wall Street high of $125.
“Similar to FANG stocks that have disrupted traditional markets with massive global TAMs, SQ’s fully cohesive solutions and rapid rate of innovation suggest that it is en route to disrupt the global payments ecosystem,” Nomura analyst Dan Dolev wrote in a report titled “Adding the ‘S’ to FANG(S).”
Dolev’s new target beats out recent boosts by two other analysts. Last week, Stifel and Evercore ISI increased their price objectives to what were, at the time, Wall Street highs of $100 and $101, respectively. Square shares rose 2.6 percent in pre-market trading after Nomura’s call. The stock has gained almost 150 percent this year.
“But is SQ too expensive?” Dolev wrote. “Not when taking into account its stellar 45% expected three-year revenue CAGR, which makes it screen more attractively than many payment peers and FANG stocks.”