Why Square Shares Plunged Today

Shares of mobile payment processor Square (NYSE: SQ) have been on quite a run this year, having more than tripled year to date as the company continues to execute well and post solid earnings results throughout the year, successive guidance raises, and strong growth of gross payment volume (GPV). However, that rally has stretched Square's valuation metrics quite a bit, and shares now trade at over nine times sales.

Given the gains, a pullback is hardly unexpected, and an analyst downgrade this morning has triggered just that. Investors are likely taking some profits off the table as a result.

Square is testing out bitcoin trading in its Square Cash app. Image source: Square.

Source: Fool.com