Block stock is a new Buy at Piper Sandler after 'impressive' Q3 results

Investing.com
2024-11-11

Investing.com - Analysts at Piper Sandler have assumed coverage of shares of Block Inc (NYSE:SQ) with an Overweight rating and a $83 price target following the payment company’s Q3 results last week. On Monday, SQ shares were trading at $79.59, up 6.74% since Friday’s close.

Last week, Block reported Q3 earnings per share (EPS) of $0.88, in line with consensus estimates, and revenue of $5.98 billion, falling short of expectations for $6.24B.

Despite this, the analysts have taken note of the company’s “impressive” margin results. “SQ posted top line results that came in softer than expected during the third quarter… Conversely, Block achieved adjusted EBITDA results that came in much healthier than expected,” Piper Sandler observed.

The firm’s price target is based on a 19x CY25E EPS estimate. Block, which has “a robust track record” of innovation is expected to continue to innovate in the software-enabled payment ecosystem.

“We believe that Block should benefit from a continued secular shift to electronic payments, as well as being on the forefront of innovation, organized around its two business segments, which are centered around merchants/sellers (Square) and consumers (Cash App),” the analysts said.

Square, which represents 34% of Q3 revenues, 12% growth (FY23) and 47% gross margins (Q3), has “significant runway of growth” according to Piper Sandler, with an addressable market size of $130B+. The key metric the analysts said they will be focused on is gross payment volume (GPV) in addition to revenue growth and margin profile.

Meanwhile, CashApp represents 66% of revenues, 33% growth and 33% gross margins. With an addressable market size of $75B+, this part of the business too has room to grow. Piper will be focussed on revenue growth, margin profile and active user dynamics to assess progress.

“In our view, with these scaled ecosystems, Block has a unique opportunity to cross-pollinate its offerings between its business and consumer ecosystems. The company has made investments to unlock this opportunity, including its Afterpay (BNPL) acquisition. Further, we believe that its early entry into Bitcoin has the potential to provide it upside in an emerging ecosystem,” the firm added.

Related Articles

Block stock is a new Buy at Piper Sandler after 'impressive' Q3 results

Morgan Stanley lifts Nvidia price target, estimates ahead of earnings

Embraer plans defense office in Europe as C-390 sales pick up

免責聲明:投資有風險,本文並非投資建議,以上內容不應被視為任何金融產品的購買或出售要約、建議或邀請,作者或其他用戶的任何相關討論、評論或帖子也不應被視為此類內容。本文僅供一般參考,不考慮您的個人投資目標、財務狀況或需求。TTM對信息的準確性和完整性不承擔任何責任或保證,投資者應自行研究並在投資前尋求專業建議。

熱議股票

  1. 1
     
     
     
     
  2. 2
     
     
     
     
  3. 3
     
     
     
     
  4. 4
     
     
     
     
  5. 5
     
     
     
     
  6. 6
     
     
     
     
  7. 7
     
     
     
     
  8. 8
     
     
     
     
  9. 9
     
     
     
     
  10. 10