Block (XYZ) is poised for growth in the medium term from product improvements, increased sales and marketing efforts and new distribution partnerships, UBS Securities said Friday in a report.
Square, the unit offering commerce products, is expected to benefit from improvements such as pre-authorization and order migration, a unified app and instant payouts for restaurant sellers, the report said.
Ramped-up sales and marketing efforts by Square, including brand marketing, trade shows and local field sales teams, are expected to drive operating leverage and yield strong returns, UBS said.
The first dedicated field sales representatives were deployed in November by Sqaure with further hires planned in Q1, the report said. New distribution partnerships across various sectors are expected to expand Square's market reach, supporting growth in 2025 and beyond, UBS said.
These efforts are expected to contribute to sustained mid-teens gross profit growth in the medium term, the report said.
UBS cut its price target on Block shares to $97 from $98 and maintained its buy rating.
On Thursday, Block reported Q4 adjusted earnings and sales that trailed estimates by analysts.
Shares of the company slumped 15% in recent Friday trading.
Price: 70.75, Change: -12.29, Percent Change: -14.80
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