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Block (XYZ)
NYSE:XYZ
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Block
(NYSE:XYZ)
72Outperform
Positive Factors
Growth Investments
Spending on growth investments like sales headcount and marketing gives confidence that the spend ramp is largely variable and intended to drive initial habituation of next stacking S-Curve.
Market Share
Square plans to accelerate more hiring as a result of market share gains in its core verticals.
Square Performance
Square acceleration should benefit from lapping of marketing investments and the benefits of a single unified app.
Negative Factors
Cash App Performance
The recent slowdown at Cash App may indicate a lower baseline growth rate going forward, leading to less confidence in its medium-term growth potential.
Guidance and Expectations
XYZ's 2025 guidance is seen as uninspiring, with a reduction in gross profit and adjusted operating income forecasts, and concerns over the steepness of the assumed growth acceleration.
Macroeconomic Conditions
XYZ's new guidance reflects a more cautious macro stance, but there is discomfort with the gross profit growth acceleration assumed for Cash App amid a worsening macro backdrop.
Block (XYZ) vs. S&P 500 (SPY)
Market Cap
$29.09B
Dividend YieldN/A
Average Volume (3M)10.15M
Price to Earnings (P/E)11.5
Beta (1Y)1.95
Revenue Growth4.60%
EPS Growth425.38%
CountryUS
Employees12,000
SectorTechnology
Sector Strength65
IndustrySoftware - Infrastructure
Share Statistics
EPS (TTM)0.56
Shares Outstanding555,001,000
10 Day Avg. Volume12,586,949
30 Day Avg. Volume10,154,305
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.00
Price to Cash Flow (P/CF)0.00
P/FCF Ratio0.00
Enterprise Value/Market Cap1.11
Enterprise Value/RevenueN/A
Enterprise Value/Gross Profit3.65
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$66.31Price Target Upside38.29% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering35
Block Business Overview & Revenue Model
Company DescriptionBlock (XYZ) is a diversified technology company operating in the financial services sector, primarily focused on providing innovative solutions for digital payments and financial management. The company offers a suite of products and services, including point-of-sale systems, peer-to-peer payment platforms, and cryptocurrency-related services, catering to both businesses and individual consumers.
How the Company Makes MoneyBlock (XYZ) generates revenue through several key streams. The primary source is transaction fees, which are charged to businesses for using its point-of-sale systems and payment processing services. Additionally, the company earns money from its peer-to-peer payment platform by charging fees for instant transfers and certain transaction types. Block (XYZ) also derives income from its cryptocurrency services, including trading fees and asset management services. Significant partnerships with financial institutions and technology providers enhance its market reach and contribute to its financial performance.
Block Financial Statement Overview
Summary
The company exhibits strong financial health with impressive revenue growth and improving margins. The balance sheet shows a robust equity position and manageable leverage, while cash flows have improved significantly. Key risks include potential debt fluctuations, but these are currently well-managed.Income Statement
The company has demonstrated impressive revenue growth, with a notable increase from $17.53 billion in 2022 to $23.94 billion in TTM 2025, reflecting strong demand for its offerings. Gross profit and net profit margins have also improved, with the net profit margin reaching 10.92% in TTM 2025. The EBIT and EBITDA margins are recovering well, indicating effective cost management and operational efficiency gains.85
Very Positive
Balance Sheet
The company's balance sheet is robust, with a consistent increase in stockholders' equity and a healthy equity ratio of 59.00% in TTM 2025. The debt-to-equity ratio is manageable at 0.28, suggesting a conservative approach to leverage. However, the total debt has fluctuated slightly, which could pose a risk if not carefully managed.78
Positive
Cash Flow
Cash flow generation is solid with a significant improvement in free cash flow from negative figures in 2023 to $1.20 billion in TTM 2025. The operating cash flow to net income ratio demonstrates strong cash conversion capabilities. While there has been some volatility in operating cash flows, the overall trajectory appears positive.80
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 24.12B | 21.92B | 17.53B | 17.66B | 9.50B | Gross Profit |
| 8.89B | 7.50B | 5.99B | 4.42B | 2.73B | EBIT |
| 892.33M | -278.84M | -577.96M | 261.71M | 272.91M | EBITDA |
| 1.35B | 390.53M | -58.76M | 408.48M | 427.38M | Net Income Common Stockholders |
| 2.90B | 9.77M | -553.00M | 166.28M | 213.10M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 12.75B | 9.42B | 8.81B | 8.14B | 5.89B | Total Assets |
| 36.78B | 33.03B | 31.36B | 13.93B | 9.87B | Total Debt |
| 7.92B | 6.07B | 6.33B | 5.52B | 3.49B | Net Debt |
| -4.34B | -2.10B | -1.39B | 1.07B | -1.70B | Total Liabilities |
| 15.54B | 14.34B | 14.11B | 10.61B | 7.19B | Stockholders Equity |
| 21.27B | 18.70B | 17.22B | 3.27B | 2.68B |
| Cash Flow | Free Cash Flow | |||
| 1.55B | -50.19M | 5.09M | 543.51M | 243.20M | Operating Cash Flow |
| 1.71B | 100.96M | 175.90M | 847.83M | 381.60M | Investing Cash Flow |
| 649.95M | 683.20M | 1.23B | -1.31B | -606.64M | Financing Cash Flow |
| 1.95B | -240.14M | 97.58M | 2.65B | 3.68B |
Block Technical Analysis
Negative
47.95
Price Trends
56.50
Negative
71.48
Negative
71.61
Negative
Market Momentum
-2.27
Positive
35.88
Neutral
19.44
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For XYZ, the sentiment is Negative. The current price of 47.95 is below the 20-day moving average (MA) of 54.07, below the 50-day MA of 56.50, and below the 200-day MA of 71.61, indicating a bearish trend. The MACD of -2.27 indicates Positive momentum. The RSI at 35.88 is Neutral, neither overbought nor oversold. The STOCH value of 19.44 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for XYZ.
Block Risk Analysis
Block disclosed 48 risk factors in its most recent earnings report. Block reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Block Peers Comparison
Overall Rating
UnderperformOutperform
Sector (60)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | $36.59B | 229.77 | 6.48% | ― | 25.54% | 40.02% | |
76 Outperform | $38.27B | 16.40 | 16.61% | 1.56% | 4.09% | 14.05% | |
74 Outperform | $42.97B | 27.79 | 21.43% | ― | 58.74% | 1127.29% | |
72 Outperform | $29.09B | 11.50 | 12.93% | ― | 4.60% | 425.38% | |
70 Outperform | $27.60B | 71.27 | 15.37% | ― | 25.63% | 118.49% | |
60 Neutral | $10.77B | 10.41 | -6.71% | 2.99% | 7.69% | -13.12% | |
54 Neutral | $39.90B | 48.99 | 5.25% | 1.95% | -9.12% | ― |
* Technology Sector Average
Performance Comparison
XYZ
Block
47.95
-25.25
-34.49%
CTSH
Cognizant
77.93
12.16
18.49%
FIS
Fidelity National Info
75.51
3.18
4.40%
TTD
Trade Desk
56.46
-32.21
-36.33%
DDOG
Datadog
106.02
-9.85
-8.50%
HOOD
Robinhood Markets
49.99
32.69
188.96%
Block Earnings Call Summary
Earnings Call Date:May 01, 2025
(Q1-2025)
| % Change Since: -18.01%|
Next Earnings Date:Jul 31, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mix of positive and negative elements. While the company showed strong gross profit growth and record adjusted operating income, challenges such as lower-than-expected Cash App performance and a cautious macroeconomic outlook were highlighted. The company's strategic initiatives, particularly in expanding Cash App and Square, are promising, although they remain cautious about potential macroeconomic headwinds.Q1-2025 Updates
Positive Updates
Strong Gross Profit Growth
Total Block gross profit was $2.29 billion, up 9% year-over-year. Square had a gross profit growth of 9% year-over-year, driven by GPV growth of 7.2%, with constant currency GPV growth of 8.2%.
Record Adjusted Operating Income
Adjusted operating income was $466 million, up 28% year-over-year, and adjusted EBITDA was $813 million, up 15% year-over-year.
Cash App Growth Initiatives
The FDIC approval to use Square Financial Services to issue consumer loans for Cash App Borrow nationwide is expected to double the number of Cash App actives that can be offered Borrow, starting in the third and fourth quarters.
Cash App Afterpay Integration
Successful early adoption and strong conversion rates for Cash App Afterpay, which allows users to split purchases retroactively on their Cash App Card.
Square Product and Go-to-Market Enhancements
Continued product innovation in Square with new features and enhancements, and successful signing of upmarket sellers through field sales and partnerships.
Negative Updates
Cash App Gross Profit Below Expectations
Cash App gross profit was up 10% year-over-year, but below expectations due to changes in consumer spending behavior, particularly around tax refund season.
Cautious Outlook Due to Macro Environment
The company has taken a more cautious stance on the macroeconomic environment, impacting guidance with anticipated gross profit growth of 12% for 2025.
Challenging Consumer Spending Behavior
Observed changes in consumer spending behavior, with a pronounced shift during the tax refund season impacting Cash App inflows and discretionary spending.
Company Guidance
During the Block First Quarter 2025 Earnings Conference Call, the company provided updated guidance and performance insights across several metrics. Total Block gross profit for Q1 2025 was $2.29 billion, marking a 9% year-over-year increase. Square's gross profit grew by 9% year-over-year driven by a 7.2% increase in gross payment volume (GPV), with constant currency GPV growth at 8.2%. Cash App gross profit rose by 10% year-over-year, although consumer spending behavior during tax refund season affected inflows. The company reported an adjusted EBITDA of $813 million, up 15% year-over-year, and adjusted operating income of $466 million, a 28% increase. For the full year, Block expects gross profit growth of 12% or $9.96 billion, with anticipated acceleration in the second half of the year. Adjusted operating income for 2025 is projected to be $1.9 billion, reflecting continued investment in high ROI growth initiatives. Additionally, the company plans to expand its Cash App Borrow product nationwide and expects significant contributions from its retroactive buy-now-pay-later product, Cash App Afterpay, in the second half of the year.Block Corporate Events
Executive/Board ChangesBusiness Operations and Strategy
Block Expands Board with Anthony Eisen Appointment
Positive
Feb 6, 2025
On February 6, 2025, Block, Inc. expanded its Board of Directors by electing Anthony Eisen, Co-Founder of Afterpay and CEO of Reshop, as a Class III director. Eisen’s extensive experience in financial services and Buy Now, Pay Later solutions, particularly through Afterpay, is expected to contribute significantly to Block’s strategic growth and evolution in financial services.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.