Investors worried that the growth of Square’s (SQ) Cash wallet app might be tied too closely to cybercurrency may have reason to relax.
In a Wednesday note, the analysts at Nomura Instinet—Square bulls who recently suggested that the Cash App could be worth $20 per share by itself—pointed to recently Cash download numbers they say run counter to declining bitcoin prices.
“Is Square a bitcoin play? We disagree, and note that Cash App downloads have been accelerating despite the slump in bitcoin prices,” wrote analyst Dan Dolev.
“The spike in bitcoin prices in late 2017 helps explain the surge in Cash App growth from +129% in 3Q17 to +181% by 4Q17. However, while bitcoin prices declined -65% vs. peak, Cash App growth has accelerated,” the analysts wrote.
Nomura Instinet cited Q2 year-over-year download growth of 148%, up from Q1’s 144%.
Nomura Instinet has a “buy” rating and a $82 price target on Barron’s Next 50 company Square’s stock; that’s about 26% above current levels and, according to FactSet, the highest on Wall Street. The company’s shares are up nearly 80% in 2018.