Square (NYSE:SQ) is down 13% since announcing Q1 2019 results May 1 after the close of markets. By comparison, the SPDR S&P 500 ETF (NYSEARCA:SPY) is down 3.3% since the beginning of May. Pushing toward the $50s, Square stock is about to become a screaming buy.

Here’s why.

Square briefly traded in the $50s in early January. Before that, you have to go back to May 2018. As Square’s business model continues to develop, a stock price in the $50s is a big-time opportunity given the changes that have occurred over the past year.

Here are just a few.

Omnichannel Retail and Square Stock

Square’s big acquisition of Weebly was completed in 2018’s second quarter, almost a year ago to the day.

Paying $271 million; $132 million in cash along with 2.4 million shares, Weebly gave Square the ability to broaden its push into omnichannel commerce by providing Square merchants with online stores that go far beyond a simple landing page.

“The revamped Square Online Store is a different proposition in its entirety, as it now promises access to real-time inventory; integration with Instagram sales; integrated shipping labels; in-store pickup service; support for Square gift cards; and — crucially — synchronization with Square’s in-store point-of-sale system, Square POS,” VentureBeat reported in March.

By integrating the Square Online Store and Square for Retail into Weebly, Square’s gone from an ecommerce also-ran to a big-time player for its small- and mid-sized customers.

The more seamless it makes the omnichannel experience, the more money it makes from processing more transactions, whether in a customer’s store or on the e-commerce site.

Caviar Is Maturing

A second acquisition, although not nearly as costly (the Q2 2018 10-Q alludes to the purchase of intangible assets and goodwill worth $9.9 million) is critical to Square’s future. The acquisition of certain assets of Zesty, a catering platform that will help Caviar, the company’s food ordering business, grow its corporate catering.

“Restaurants turn to Caviar to reach more diners and grow their businesses. Expanding our corporate catering product with Zesty enables us to offer our restaurant partners another way to boost sales through higher-margin, large-format catering orders,” said Gokul Rajaram, Caviar Lead at Square in April 2018. “Caviar is thriving, and we’re excited to supercharge its success with Zesty and double down on an area with great opportunity to drive more growth for our business.”

An example of how Zesty’s been able to help the development of Caviar, in late March, Square announced that it was partnering with the Washington Nationals and their catering partner, Levy Restaurants, to offer in-seat ordering by fans in the stadium. It will also allow them to order food in advance so if you’re on your way to the park, you can order the food on the Caviar app and you’ll get an alert when it’s ready to be picked up.

Amazon (NASDAQ:AMZN) is trying to provide as much of what you need in your home and life as it possibly can. Square is trying to inject itself into as many payment situations as it possibly can.

Caviar might not be a line item on Square’s income statement, but someday it could be. The same goes for Square for Retail.

Square Stock and Other Properties 

Square launched Cash App in 2013. Since then, the app that allows individuals and businesses to send and receive money has continued to gain customers. In the first quarter, the Cash App volume grew two-and-a-half times Q1 2018. You can even buy, hold, and sell bitcoin through the Cash App.

Thanks to Cash App, Caviar and Square Capital, Square’s subscription and services-based revenue in the first quarter increased by 126% to $218.9 million. Subscription and services-based revenue now account for 23% of its overall revenue, 800 basis points higher than in the same quarter a year earlier.

Square Capital, the company’s loan program for its customers, facilitated 70,000 loans during the first quarter for a total of $508 million, 50% higher year over year.

The best thing about its subscription and services-based revenue are the margins. In the first quarter, Square’s gross profit margin was 72%. By comparison, its transaction-based revenue had a gross profit margin of 38%, which means Square makes twice as much from a dollar of subscription and services-based revenue than it does from transaction-based revenue.

So, the fact analysts were complaining about gross payment volume (GPV) of large sellers decelerating from 41% in Q3 2018 to 39% in Q4 2019 to 37% in Q1 2019, doesn’t matter nearly as much given the growth in its more profitable revenue stream.

I’ll take 26% growth in transaction-based revenue every day of the week as long as Square continues to grow subscription and services-based revenue at a much faster clip.

The Bottom Line on Square Stock

The fact that investors weren’t happy with Square’s second-quarter guidance should be music to the ears of investors looking to get a screaming deal on its stock price.

From where I sit, Square’s overall business continues to get better and better. The profits will come.

And when they do, you’ll be happy as a clam you were able to buy in the low $60s or high $50s.  

At the time of this writing Will Ashworth did not hold a position in any of the aforementioned securities.