<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Square (NYSE: SQ) has taken investors into a crazy race in recent years, but do not sell just because stocks have rebounded. "data-reactid =" 11 ">Square (NYSE: SQ) has taken investors into a crazy race in the last 12 months, but do not sell just because stocks have rebounded.

If you take a look at Square's chart over the last year, you'll see that it looks like a roller coaster track. Square's stock price rose to about $ 45 a year ago and, thanks to accelerating growth in key areas of its business, the stock has steadily increased for reach 100 dollars by the end of September.

Then, as fears of an economic slowdown invaded the stock market, Square was hit hard, falling to around $ 50 at its lowest point in December.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "SQ given by YCharts. "data-reactid =" 27 "> SQ data by YCharts.

<p class = "web-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "To be fair, the decline was fueled by a few factors specific to companies, in addition to the general volatility of the market. "CFO Sarah Friar left the companyand anyone who has been following Square for a while knows she was an absolute rock star in that role. In addition, many analysts have expressed a negative point of view on Square's first project in consumer credit with its Proceeds. "Data-reactid =" 28 "> To be fair, the decline was fueled by two business-specific factors, in addition to the general factors: Financial Director Sarah Friar left the company and all Square followers Some time know that she was an absolute rock star in this role and many analysts have criticized Square's first commitment in consumer credit with its.

As you can see, the stock has rebounded slightly since fears of a recession / slowdown eased. On February 8, stocks traded at about $ 72, an increase of 73% over the past year. However, do not be so quick to sell just because of this rally.

Man using a Square card reader on a payment terminal.

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Source of the image: Square.

An excellent long-term business strategy

If you plan to take advantage of the recent Square rally, I urge you to take a step back and consider the long-term prospects of the company. The vast majority of its revenue potential remains untapped.

Its core business of payment processing still offers tons of addressable opportunities, for starters. The current $ 90 billion gross annualized payment volume through Square equipment accounts for less than 2% of total US card payments. Square has been able to integrate larger businesses into its ecosystem with new hardware offerings. And that does not even take into account international opportunities, because the company operates in a handful of countries around the world.

Square Capital's business loan platform, the Square Installments consumer credit product and other Square business areas are still in their infancy.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "In addition, Square's professional customer base has significantly increased, do not forget the side of the consumer-oriented business.Cash App has recently surpassed Venmo in terms of total downloads, and the platform has millions of active users. Do not forget that this user base is largely unmonetized at this point, but that it creates a ton of opportunities for cross selling future Square offerings. And if the former financial director Sarah Friar's vision for the company materializes, Square could eventually offer savings and control products, an investment platform, personal credit solutions and much more to this vast customer base. "Data-reactid =" 55 "> The professional customer base has increased significantly, do not forget the customer side: the company's Cash application has recently exceeded Venmo in terms of the total number of downloads, and the platform With millions of active users in the pipeline, for now, if the vision of the former CFO's company, Sarah Friar, materializes, Square could eventually offer savings and control products, a investment platform and personal loan solutions … and more to this massive customer base.

The story continues

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Finally, Square does an excellent job of reinforcing the map of The recent commercial debit is an excellent example: it not only differentiates the company from other payment processors by allowing merchants immediate access to their money, but it also aims to give 2.75% cardholders. other Square, encourages Square traders to support each other. I am close to the card payments industry and I can tell you that this rate of debit card rewards / rewards is unprecedented. "Data-reactid =" 60 "> Finally, Square is remarkably strengthening its ecosystem, and the recently introduced commercial debit card is a good example: it not only differentiates the company from other payment processors by allowing merchants to immediately access their money, but it also has the innovative goal of offering cardholders a 2.75% discount to other Square, encourages Square traders to support each other. I am the card payments industry and I can tell you that this discount / rewards rate of a debit card has never been seen.

Do not sell just because stocks have rebounded

If you held out while Square was free falling by the end of 2018, it might be tempting to withdraw money. After all, Square has rebounded 38% since its lowest level of Christmas Eve – it's a stellar gain in just over a month.

Nobody has a crystal ball capable of predicting the future of a company, and I am certainly not an exception. However, Square's growth rate, its untapped market potential and its millions of still-unknown ecosystems tell us that the best days of this company are yet to come. I bought Square for the first time at just over $ 11 per share in 2016. So I'm sitting on a gain of over 500%. I do not plan to sell any of my shares and I suggest you think twice before selling.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = " More from The Motley Fool "data-reactid =" 64 "> More from The Motley Fool

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Matthew Frankel, CFP owns Square shares. The Motley Fool owns shares and recommends Square. The Motley Fool has a disclosure policy."data-reactid =" 72 ">Matthew Frankel, CFP, owns Square shares. The Motley Fool owns shares and recommends Square. Motley Fool has a disclosure policy.