There were four little words that drove a lot of the frenzy during the Black Friday and Cyber Monday shopping period: Buy Now, Pay Later. Otherwise known as BNPL, the companies that offered such services reaped a phenomenal windfall as more and more shoppers wanted payment plans for their holiday hauls. And Block (NYSE:SQ), formerly Square, was one of the biggest winners of all, with shares up over 5% in Tuesday afternoon’s trading.
Square made a name for itself by offering vendors a way to take credit cards virtually anywhere with a small dongle, a computer—even a tablet—of some sort, and access to the internet. It advanced significantly since then, of course, and now is driving sales for all manner of vendors. In fact, now, Block sellers—along with their cohorts at Afterpay—set a new record for overall transactions, reaching a combined total of 70 million. That’s up 14% against this time last year, and featured shoppers who were willing to spend hard; online cart sizes were nearly four times larger than they were in person.
The Effects Weren’t Universal, However
Even as Block and Afterpay led a shopping renaissance of customers ready to buy, not everyone saw the same kind of gains. PayPal (NASDAQ:PYPL) saw its share drop slightly, though it still managed to process 13% of the transactions in the United States and 14% of the world’s transactions during Cyber Week. Interestingly, Block had substantial interest from the beauty and wellness sector, as 108% more of them offered discounts for the Black Friday to Cyber Monday corridor. Ancillary operations, like restaurants, also saw their traffic jump as turkey-weary patrons gave restaurants 15% increases in transaction traffic.
What is the Prediction for Block Stock?
Turning to Wall Street, analysts have a Strong Buy consensus rating on SQ stock based on 26 Buys and eight Holds assigned in the past three months, as indicated by the graphic below. After a 1.82% rally in its share price over the past year, the average SQ price target of $71.87 per share implies 13.07% upside potential.