Cash In On Square's Run, Analyst Says

Square Inc SQ stock is up an incredible 252 percent in 2017, but one analyst says now is the time for traders to take their profits to the bank.

Square stock has come too far too fast and is due for a significant pullback, Miller Tabak analyst Matt Maley said during a Tuesday CNBC appearance. The stock is now up 400 percent from its $9 IPO price in roughly two years.

Square is trading 90 percent above its 200-day simple moving average, making it more overbought than Facebook Inc FB was at any point during its first two years on the market, Maley said. 

“It's getting very stretched, and unless you think this is the next Facebook, this stock is going to have to pull back a bit before it goes any higher."

Strategic Wealth Partners CEO Mark Tepper said Square’s fundamental picture doesn’t support its extreme run.

“Square has a good track record of losing money, and there's just no clear path to profitability in the near future,” he said Monday.

Tepper acknowledged that Square’s technology is impressive, but he said it’s not disruptive in any major markets. If anything, Square could be at risk of competition from other companies, including Paypal Holdings Inc PYPL.

Traders certainly don’t seem concerned about Square’s profitability or its lofty share price. The stock traded higher by another 4.7 percent on Tuesday and is now up 18.9 percent in the past five trading sessions.

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Photo courtesy of Square.