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Will Portfolio Strength Benefit Block's (SQ) Q1 Earnings?

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Block (SQ - Free Report) is set to report first-quarter 2022 results on May 5.

The company’s portfolio strength is likely to have contributed well to the first-quarter performance.

Moreover, its friendly ecosystem, which enables sellers to combine software, hardware and payment services to accept payment from customers, is expected to have helped maintain solid momentum across sellers.

All these factors are likely to have driven Block’s Gross Payment Volume (GPV) growth in the first quarter.

The Zacks Consensus Estimate for GPV for the first quarter is pegged at $44.9 billion, suggesting growth of 35.8% from the year-ago reported figure.

Click here to know how the company’s overall first-quarter performance is expected to have been.

Block, Inc. Price and EPS Surprise

 

Block, Inc. Price and EPS Surprise

Block, Inc. price-eps-surprise | Block, Inc. Quote

Portfolio Strength: Key Catalyst

The impacts of Block’s portfolio strength are anticipated to get reflected in the first-quarter results.

In the to-be-reported quarter, the company completed the acquisition of Afterpay. On the back of this, it strives to enable sellers to offer 'buy now, pay later' (BNPL) at checkout and allow Cash App customers to discover sellers and BNPL offers.

Moreover, Block launched its first integration with Afterpay to offer BNPL functionality to sellers in the United States and Australia who use Square Online for e-commerce.

Block announced its official arrival in Spain after its successful launch of the Early Access Program in the country. Notably, entrepreneurs, freelancers and business owners of the country can access the company’s comprehensive suite of tools to grow their businesses.

Additionally, Block made its music and entertainment platform, TIDAL, available for music fans and artists in the United Arab Emirates.

Apart from the latest introductions, the company’s other product lines such as Square Terminal, Instant Deposits, Cash Card, Square Register, Square Reader, Square Stand and API platforms are expected to have benefited the first-quarter revenues.

The growing adoption of Cash App in the bitcoin space is likely to have aided growth in Block’s bitcoin revenues, which, in turn, is expected to have continued to drive top-line growth in the to-be-reported quarter.

The impacts of all the above-mentioned products are expected to get reflected in the company’s first-quarter GPV.

Zacks Rank & Stocks to Consider

Currently, Block carries a Zacks Rank #3 (Hold).

Investors interested in the broader technology sector can consider better-ranked stocks like Jabil (JBL - Free Report) , Analog Devices (ADI - Free Report) , and Broadcom (AVGO - Free Report) . While Jabil currently sports a Zacks Rank #1 (Strong Buy), Analog Devices and Broadcom carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Jabil has gained 12.6% over a year. The long-term earnings growth rate for JBL is currently projected at 12%.

Analog Devices has gained 3.5% over a year. The long-term earnings growth rate for ADI is currently projected at 12.3%.

Broadcom has gained 29.5% over a year. The long-term earnings growth rate for AVGO is currently projected at 14.5%.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.


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