Block’s Promising Growth and Strategic Execution Amid Market Confusion

Analyst Bryan Bergin of TD Cowen reiterated a Buy rating on Block, reducing the price target to $91.00.

Bryan Bergin has given his Buy rating due to a combination of factors, including Block’s strong quarterly performance and promising future prospects. The company reported a significant increase in Cash App monthly transacting actives and growth in gross profit, driven by the scaling of its Borrow and Buy Now, Pay Later services. Additionally, Block’s Square segment showed an acceleration in gross payment volume, reflecting successful product and go-to-market initiatives.
Bergin acknowledges some market confusion regarding the Square gross profit to gross payment volume spread, which has led to a surprising adverse share reaction. However, he views this as an opportunity, as Block continues to execute on its strategic goals. The company has guided for strong growth in the upcoming quarter and is approaching its long-term targets. With an upcoming Investor Day expected to provide further clarity and a new financial framework, Bergin sees potential for increased investor interest. Furthermore, Block’s capacity for stock buybacks adds to its attractiveness as an investment.

Based on the recent corporate insider activity of 122 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of XYZ in relation to earlier this year.