Block’s Stock Tumbles Amid Earnings Miss

Block ( (XYZ) ) has fallen by -11.91%. Read on to learn why.

Block, the fintech and cryptocurrency company, experienced a significant decline in its stock price, dropping by 11.91% over the past week. This downturn was primarily driven by the company’s disappointing third-quarter earnings report, which fell short of Wall Street’s expectations. Block’s earnings per share came in at $0.54, missing the anticipated $0.64, and its revenue of $6.11 billion was also below the forecasted $6.31 billion. The company attributed these results to higher-than-expected operating expenses, which reached $2.20 billion compared to the consensus forecast of $1.91 billion.

Despite the negative earnings report, some analysts remain optimistic about Block’s future prospects. The company’s Cash App, a key revenue driver, showed strong performance, particularly in the Buy Now, Pay Later segment, contributing to a 24% year-over-year profit increase. Analysts like Susquehanna’s James Friedman and Wells Fargo have maintained a ‘Buy’ rating on Block, with price targets set at $90 and $91, respectively. However, others, such as Morgan Stanley’s James Faucette and Piper Sandler’s Patrick Moley, have lowered their price targets, citing concerns over Block’s slower growth and missed earnings expectations.

Looking ahead, Block’s management remains focused on expanding its blockchain technologies and crypto initiatives while continuing to leverage its successful Cash App platform. The company projects a gross profit of $2.755 billion for the fourth quarter, slightly above analyst expectations. Despite the recent stock price drop, Block retains a Moderate Buy consensus rating among analysts, with an average price target suggesting a potential upside of over 25% from current levels.