Square is operating outside the box

I am assigning Square, Inc. (NYSE:SQ) a negative risk/reward rating based on its extreme valuation, the sustainability of its recent financial outperformance, and questionable capital allocation choices. Given the vast opportunity set provided by the fintech space, Square offers enticing growth potential once the above concerns are resolved. In this article I deconstruct Square’s performance though the first half of 2021 to uncover the underlying growth rate and profitability of the business model before turning to an investment strategy for the shares.