Square’s Cash App offers peer-to-peer money-transfer services for free but makes money when users spend funds through an associated debit card.

Square Inc. is seeing further momentum with its Cash App, and that could help power the stock to $300, according to Mizuho analyst Dan Dolev.

Dolev raised his price target on Square’s stock to $300 from $225 in a Thursday note to clients, becoming the most upbeat analyst covering Square SQ, +2.10% among those tracked by FactSet. The stock was up 3% in Thursday morning trading.

The Cash App is Square’s mobile wallet that lets people send money to friends, buy and sell bitcoin, and invest in equities. The basic money-transfer features put the company up against PayPal Holdings Inc.’s PYPL, +0.35% Venmo, but Dolev said that the Cash App seems to be making inroads in areas that are more typically Venmo strongholds.

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The Cash App is thought to be popular in southeastern states, while Venmo is more popular in coastal states including New York and California, though Dolev said his recent analysis of Google search trends found that Cash App searches are growing in the most populous states. In 2017 and 2018 the Cash App accounted for about 40% of searches for either Venmo or the Cash App in the top 15 most populous states. Since April of this year, however, the Cash App has achieved a 60% share of such searches.

In addition, Dolev is upbeat about the more diversified ways that Square is monetizing the Cash App. Previously, the overwhelming driver of Cash App profits was its instant deposit feature, which allows users to pay a small fee to transfer their money out of the app. Dolev estimates that this feature accounted for nearly 80% of Cash App gross profit in 84%, but he pegs that figure at 54% for the latest quarter, as Square saw increased traction for things like its Cash Card debit card and its Cash App business platform, on which businesses pay a fee to use the app as a means of accepting payments.

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Dolev likes that Square is seeing new customers quickly adopt revenue-generating features. The cohort of about 8 million users that Square added in 2018 saw an estimated gross profit per user of $8 that year, he said. The estimated gross profit per user rose to $22 in 2019.

Shares of Square have gained 206% so far this year as the S&P 500 SPX, -0.23% has risen 10.4%.

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