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Block Inc (SQ-N) has experienced significant volatility recently, with a notable 18% drop in share price following disappointing quarterly guidance. Despite being 40% off its highs, some experts believe the stock is currently undervalued and oversold, presenting a potential buying opportunity. The company, previously known as Square, leads the U.S. point-of-sale systems market and has a substantial user base of 56 million consumers and 4 million businesses, processing $228 billion in payments annually. Its platform business model is highlighted as a strength, despite recent downgrades from analysts. While some experts are cautious due to the competitive fintech landscape, others advocate for holding and investing in Block given its adaptability and growth prospects, suggesting it holds better long-term potential than larger competitors.
Loves that it's a platform business. Plays in a space that competitors are too big for or the space is too small. Ability to build technology and adapt revenue streams with the times. Proven to execute extremely well. Has gone head to head with AMZN and won. Performance has been great, though an up-and-down ride at times. Can hold for a long time. No dividend.
Much better buying opportunity and growth prospects than the Mag 7.
SQ is now trading at 31x times' Forward P/E. In the 2Q, SQ’s revenue grew 25% to $5.53B, beating the estimates of $5.1B and EPS was $0.39 beating estimates of $0.37. The cash app users remain solid, up 15% to around 54 million monthly activities. We think the share price overreacted somewhat because of overall gross profit growth deceleration from 32% in Q1 to 27% in Q2, and expected to further decelerate to the 21% range. The gross payment volume (GPV) also decelerated significantly to only 12% growth compared to more than 20% last year. The balance sheet is strong, with net cash of around $600M. Overall, the quarter was okay, but a deceleration in growth in operating metrics worries investors. However, we think the Square payment ecosystem is solid, we think SQ is a HOLD for now. Block's healthy revenue growth and improving trends for operating margin should pave the way for profitability, despite decelerating near-term volume growth. Management raised guidance again to deliver Ebitda of $1.5 billion for 2023, a gain of $25 million vs. a loss of $115 million previously, even as some operating expenses from 1Q were pushed forward. Diversification of revenue streams is positive, with each vertical software offering now generating more than $100 million in annualized gross profit.
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A short-seller this week hammered shares. But young people like Block for its app and that's why Wall Street loves it, though if the Fed stays hawkish nothing can save this or fintech. If Block were regulated like a big bank, SQ would be overvalued. So, Block isn't overvalued as it appears. Also, he doesn't see Block's partners dropping then. That said, the short-seller has a good track record and raises some valid question. He doesn't blame anyone selling this.
Block Inc is a American stock, trading under the symbol SQ-N on the New York Stock Exchange (SQ). It is usually referred to as NYSE:SQ or SQ-N
In the last year, 2 stock analysts published opinions about SQ-N. 2 analysts recommended to BUY the stock. 0 analysts recommended to SELL the stock. The latest stock analyst recommendation is . Read the latest stock experts' ratings for Block Inc.
Block Inc was recommended as a Top Pick by on . Read the latest stock experts ratings for Block Inc.
Earnings reports or recent company news can cause the stock price to drop. Read stock experts’ recommendations for help on deciding if you should buy, sell or hold the stock.
2 stock analysts on Stockchase covered Block Inc In the last year. It is a trending stock that is worth watching.
On 2025-04-01, Block Inc (SQ-N) stock closed at a price of $55.41.
It rallied from October 2023 to December 2024, but has recently sold off. A few weeks ago, they reported a quarter that some didn't like due to weak guidance. Shares dropped 18% in one day and is now 40% off highs. The stock is too cheap now and oversold