Block (XYZ) AI Stock Analysis

• Market Cap: $46.63B
• Dividend Yield: N/A
• Average Volume (3M): 5.94M
• Price to Earnings (P/E): 16.6
• Beta (1Y): 1.72
• Revenue Growth: 1.41%
• EPS Growth: 262.31%
• Country: US
• Employees: 12,000
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Infrastructure
• EPS (TTM): 0.62
• Shares Outstanding: 549,574,000
• 10 Day Avg. Volume: 5,328,230
• 30 Day Avg. Volume: 5,944,001
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 0.87
• Enterprise Value/Revenue: 1.71
• Enterprise Value/Gross Profit: 4.40
• Enterprise Value/Ebitda: 21.17
• 1Y Price Target: $88.04
• Price Target Upside: 13.26% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 33

• Rating: 71 Outperform
• Price Target: $85.00 ▲(9.35% Upside)

The overall stock score of 71 reflects a balanced outlook. The company's strong earnings call performance and reasonable valuation are significant positives. However, concerns about declining revenue growth and negative free cash flow growth weigh on the financial performance score. Technical indicators suggest a stable price trend, supporting a moderate investment outlook.

Positive Factors

Cash App Growth

The reacceleration of Cash App's gross profit growth indicates strong user engagement and adoption, enhancing Block's competitive position in digital payments.

International Expansion

Accelerated international growth reflects Block's successful expansion strategy, increasing its global footprint and revenue diversification.

Product Innovation

Ongoing product innovation, such as new AI and payment solutions, strengthens Block's market position and supports long-term growth through enhanced service offerings.

Negative Factors

Revenue Growth Decline

A significant decline in revenue growth could indicate market saturation or increased competition, potentially impacting future earnings and market share.

Negative Free Cash Flow Growth

Negative free cash flow growth suggests potential cash management issues, limiting Block's ability to invest in growth opportunities and manage debt.

Margin Pressure

Rising costs and margin pressure from expansion initiatives could reduce profitability, challenging Block's ability to maintain financial performance.

Block Business Overview & Revenue Model

Company Description

Block, Inc., together with its subsidiaries, creates tools that enables sellers to accept card payments and provides reporting and analytics, and next-day settlement. It provides hardware products, including Magstripe reader, which enables swiped transactions of magnetic stripe cards; Contactless and chip reader that accepts Europay, MasterCard, and Visa (EMV) chip cards and Near Field Communication payments; Square Stand, which enables an iPad to be used as a payment terminal or full point of sale solution; Square Register that combines its hardware, point-of-sale software, and payments technology; Square Terminal, a payments device and receipt printer to replace traditional keypad terminals, which accepts tap, dip, and swipe payments. The company also offers various software products, including Square Point of Sale; Square Appointments; Square for Retail; Square for Restaurants; Square Online and Square Online Checkout; Square Invoices; Square Virtual Terminal; Square Team Management; Square Contracts; Square Loyalty, Marketing, and Gift Cards; and Square Dashboard. In addition, it offers a developer platform, which includes application programming interfaces and software development kits. Further, the company provides Cash App, which enables to send, spend, and store money; and Weebly that offers customers website hosting and domain name registration solutions. It serves in the United States, Canada, Japan, Australia, Ireland, France, Spain, and the United Kingdom. The company was formerly known as Square, Inc. and changed its name to Block, Inc. in December 2021. Block, Inc. was incorporated in 2009 and is based in San Francisco, California.

How the Company Makes Money

Block generates revenue through multiple streams including transaction fees charged on payments processed through its platforms, subscription fees for premium services offered to merchants, and commissions from cryptocurrency transactions. Additionally, the company has formed strategic partnerships with various financial institutions and e-commerce platforms, enhancing its market reach and customer base. The growing adoption of digital payment solutions and the increasing interest in cryptocurrencies further contribute to Block's earnings potential.

Block Financial Statement Overview

Summary

The company exhibits strong profitability metrics with a high gross profit margin and a healthy net profit margin. However, the significant decline in revenue growth and negative free cash flow growth are areas of concern. The balance sheet is strong with low leverage and a solid return on equity, suggesting financial stability. The cash flow situation needs improvement, particularly in terms of growth.

Income Statement

The company shows a strong gross profit margin of 39.45% in the TTM, indicating effective cost management. However, the revenue growth rate has declined significantly by 42.2% in the TTM, which is concerning. The net profit margin is healthy at 12.41%, but the EBIT and EBITDA margins are relatively low, suggesting potential inefficiencies in operations.

Balance Sheet

The debt-to-equity ratio is low at 0.28, indicating a conservative leverage position, which is a positive sign of financial stability. The return on equity is solid at 13.95% in the TTM, reflecting effective use of equity. The equity ratio is 60.14%, showing a strong equity base relative to total assets.

Cash Flow

The free cash flow growth rate is negative at -11.53% in the TTM, which is a concern. However, the operating cash flow to net income ratio is 0.12, and the free cash flow to net income ratio is 0.88, indicating that the company is generating cash relative to its net income, albeit at a declining rate.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	23.83B	24.12B	21.92B	17.53B	17.66B	9.50B
Gross Profit	9.25B	8.73B	7.33B	5.68B	4.31B	2.66B
EBITDA	1.92B	1.74B	379.42M	-58.76M	408.48M	427.38M
Net Income	2.96B	2.90B	9.77M	-540.75M	166.28M	213.10M
Balance Sheet
Total Assets	36.86B	36.78B	33.03B	31.36B	13.93B	9.87B
Cash, Cash Equivalents and Short-Term Investments	11.72B	8.57B	6.25B	8.81B	8.14B	3.85B
Total Debt	6.12B	7.92B	6.07B	6.33B	5.52B	3.49B
Total Liabilities	14.74B	15.54B	14.34B	14.11B	10.61B	7.19B
Stockholders Equity	22.16B	21.27B	18.70B	17.22B	3.27B	2.68B
Cash Flow
Free Cash Flow	1.06B	1.55B	-50.19M	5.09M	543.51M	-15.29M
Operating Cash Flow	1.21B	1.71B	100.96M	175.90M	847.83M	173.11M
Investing Cash Flow	211.47M	649.95M	683.20M	1.23B	-1.31B	-606.64M
Financing Cash Flow	-1.34B	1.95B	-240.14M	97.58M	2.65B	3.68B

Block Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 77.73
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For XYZ, the sentiment is Positive. The current price of 77.73 is above the 20-day moving average (MA) of 76.17, above the 50-day MA of 76.24, and above the 200-day MA of 69.71, indicating a bullish trend. The MACD of 0.16 indicates Positive momentum. The RSI at 54.29 is Neutral, neither overbought nor oversold. The STOCH value of 47.05 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for XYZ.

Block Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
PYPL	80 Outperform	$66.11B	14.82	22.92%	―	4.05%	13.85%
CPAY	77 Outperform	$20.20B	19.44	31.43%	―	9.22%	6.60%
GPN	74 Outperform	$21.11B	14.94	6.21%	1.14%	-4.17%	4.76%
FOUR	73 Outperform	$6.71B	28.14	19.00%	―	23.86%	79.35%
TOST	73 Outperform	$21.96B	109.86	14.51%	―	26.11%	―
XYZ	71 Outperform	$46.63B	16.63	14.27%	―	1.41%	262.31%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%