Here is my best stock to buy in September

Since its IPO in 2015, Square (NYSE: SQ) First a payment processing company, it has become an ecosystem of financial services, both for small businesses and for individuals, which is one of the leaders of the cash war. The company's payment processing equipment is used in US companies. Its business loan program has helped small businesses with billions of dollars in cash. Its Cash application is actively used by 15 million people. And that is the stock that is at the top of my list as we approach the month of September.

Although Square grew by 12% in 2019, the company still has a gap of almost 40% compared to its all-time highs, despite fairly encouraging growth in its business. It may be time to buy Square before the market realizes how huge its potential is.

Square revolutionized the processing of small business payments. Source of the image: Getty Images.

Why did Square get poor results?

There are a few reasons why Square has underperformed in recent years. Financial Director Sarah Friar left the company soon after reaching a record high last year. Frankly, Friar did a remarkable job.

Another reason is the worrying growth. Square's most recent forecast was slightly below analysts' expectations, and when a stock is primarily valued based on its future potential, just like Square, this can still be a concern. And Square recently announced that he was selling his food delivery platform, Caviar, and investors seemed disappointed to hear the news.

Sky is the limit

That said, it's important to focus on Square's tremendous growth story and its even more amazing future potential.

To cite just a few statistics, Square posted adjusted revenue growth of 46% in the second quarter, and its core payments processing business now has an annual processing rate of over $ 100 billion. And as Square is just starting to adapt to larger merchants as customers, it could still leave a huge room for growth – after all, that's only 0.2% of the $ 45 trillion projected global card payments by 2023.

Square Capital, the company's corporate lending platform, has grown 36% over the past year and has now generated more than $ 5 billion in loans. And Square's Cash App has gained popularity on the business side. The company's person-to-person payment platform generated $ 135 million in revenue in the second quarter – an annualized rate of increase significantly higher than From PayPal (NASDAQ: PYPL) Venmo and is up just $ 1 million in the same quarter in 2016.

Speaking of Cash App, this might just be the tip of the iceberg. Square had previously stated that she ultimately wanted to become a provider of virtually all the financial services that her clients might need. This could mean savings accounts and current accounts, personal loans, an investment platform, and so on. And the app has 15 million active users that Square could cross-sell to such products.

It should also be noted that Square is a potential acquisition target. There are several giants of technology who have fintech ambitions, and they have Deep pockets. In the right circumstances, I could see a company like Apple or Facebook Place to buy. I do not particularly see this as the most likely outcome, but it is certainly a possibility to note.

A great way to add fintech to your wallet

To be perfectly clear, I do not think that the way to Square's success (at least in terms of the price of its shares) will be straightforward. The guidelines will be adjusted from time to time and, like any business with such rapid growth, there will likely be turbulence along the way.

I absolutely do not know where Square will be in action in six months, a year or even a few years. However, I am confident that I have a good idea of ​​the situation in five or ten years, much more than what it offers today.