We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
With the Q2 earnings season set to ramp up following the Fourth of July holiday, Block (SQ - Free Report) is a tech stock that looks poised for a rebound leading up to its quarterly results in early August.
The innovative provider of point of sales solutions (POS) appears to be overlooked as SQ has now fallen -26% from its 52-week high of $87 a share in March.
Still, the expansive growth Block was able to display in Q1 is thought to have continued and strong financial results can of course lead to upward momentum for stocks.
Keeping this scenario in mind, Block’s stock currently sports a Zacks Rank #1 (Strong Buy) and lands the Bull of the Day.
Q2 Sneak Preview
Investors are always looking for stocks that are expected to post robust quarterly growth and improved financial fundamentals and Block is on this radar.
Another quarter of double-digit top and bottom-line growth appears to be in the cards with Q2 sales projected to rise 13% to $6.29 billion and EPS projections of $0.75 would reflect a 92% increase from $0.29 a share in the comparative quarter.
Block is becoming a staple of the new American economy
Notably, Cash App's popularity has been the primary catalyst to Block’s expansion along with hardware POS offerings such as its patented Square Reader machines with the company having a comprehensive commerce suite that fuels entrepreneurship by helping sellers grow their businesses.
Co-founder and Chairman Jack Dorsey has also strived for other routes to keep up Block’s relevance and expansion, from acquiring hip-hop mogul Jay-Z’s Tidal music platform in 2021 to offering crypto-related services. In addition to develping a full bitcoin mining system Block provides a Bitcoin Hardware Wallet which offers storage for bitcoin holders.
Loosely speaking, Block may be a more affordable option for investors seeking exposure to bitcoin than Coinbase (COIN - Free Report) while being a safer choice in regards to other crypto miners such as Marathon Digital (MARA - Free Report) or Riot Platforms (RIOT - Free Report) . That notion is only magnified when considering Block’s diverse business operations along with the fact that the price of Bitcoin has soared in the last year and currently sits over $60,000.
Price of Bitcoin
Image Source: Microsoft Bing via Refinitiv
Growth Trajectory
Overall, Block's total sales are projected to increase 15% in fiscal 2024 and are slated to expand another 12% in FY25 to $28.22 billion. More impressive, annual earnings are now expected to soar 73% this year to $3.11 per share versus $1.80 a share in 2023. Plus, FY25 EPS is projected to climb another 30% to $4.04.
Better still, Block’s stock is trading at 20.7X forward earnings and at 1.7X sales which are much more reasonable valuations than the stretched premiums it has commanded in the past.
Bottom Line
Block is once again becoming one of the most appealing business services companies to invest in at the moment. While it may be too soon to call Block’s stock an absolute steal at current levels, a sharp rebound looks justified considering the company’s attractive growth trajectory and innovative business offerings.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Bull of the Day: Block (SQ)
With the Q2 earnings season set to ramp up following the Fourth of July holiday, Block (SQ - Free Report) is a tech stock that looks poised for a rebound leading up to its quarterly results in early August.
The innovative provider of point of sales solutions (POS) appears to be overlooked as SQ has now fallen -26% from its 52-week high of $87 a share in March.
Still, the expansive growth Block was able to display in Q1 is thought to have continued and strong financial results can of course lead to upward momentum for stocks.
Keeping this scenario in mind, Block’s stock currently sports a Zacks Rank #1 (Strong Buy) and lands the Bull of the Day.
Q2 Sneak Preview
Investors are always looking for stocks that are expected to post robust quarterly growth and improved financial fundamentals and Block is on this radar.
Another quarter of double-digit top and bottom-line growth appears to be in the cards with Q2 sales projected to rise 13% to $6.29 billion and EPS projections of $0.75 would reflect a 92% increase from $0.29 a share in the comparative quarter.
Block is becoming a staple of the new American economy
Notably, Cash App's popularity has been the primary catalyst to Block’s expansion along with hardware POS offerings such as its patented Square Reader machines with the company having a comprehensive commerce suite that fuels entrepreneurship by helping sellers grow their businesses.
Co-founder and Chairman Jack Dorsey has also strived for other routes to keep up Block’s relevance and expansion, from acquiring hip-hop mogul Jay-Z’s Tidal music platform in 2021 to offering crypto-related services. In addition to develping a full bitcoin mining system Block provides a Bitcoin Hardware Wallet which offers storage for bitcoin holders.
Loosely speaking, Block may be a more affordable option for investors seeking exposure to bitcoin than Coinbase (COIN - Free Report) while being a safer choice in regards to other crypto miners such as Marathon Digital (MARA - Free Report) or Riot Platforms (RIOT - Free Report) . That notion is only magnified when considering Block’s diverse business operations along with the fact that the price of Bitcoin has soared in the last year and currently sits over $60,000.
Price of Bitcoin
Image Source: Microsoft Bing via Refinitiv
Growth Trajectory
Overall, Block's total sales are projected to increase 15% in fiscal 2024 and are slated to expand another 12% in FY25 to $28.22 billion. More impressive, annual earnings are now expected to soar 73% this year to $3.11 per share versus $1.80 a share in 2023. Plus, FY25 EPS is projected to climb another 30% to $4.04.
Better still, Block’s stock is trading at 20.7X forward earnings and at 1.7X sales which are much more reasonable valuations than the stretched premiums it has commanded in the past.
Bottom Line
Block is once again becoming one of the most appealing business services companies to invest in at the moment. While it may be too soon to call Block’s stock an absolute steal at current levels, a sharp rebound looks justified considering the company’s attractive growth trajectory and innovative business offerings.