Block (XYZ) likely faces "slightly lower" margin expectations ahead, though it is well placed for share gains amid growing product monetization and the "still-low" penetration of its total addressable market, Oppenheimer said in a note e-mailed Friday.

The firm said Block's Q4 results were mixed, with adjusted operating income topping expectations, but gross profit and adjusted earnings before interest, taxes, depreciation and amortization coming in below because of lower-than-expected transaction take rate of the company's Square segment.

Oppenheimer lowered its adjusted EBITDA forecast by 4% for 2025 and by 3% for 2026 due to "slightly lower" margin projections.

Square's gross payment volume growth is expected to accelerate through expanded US sales teams, increased international sales presence and more partnerships, according to the note.

Oppenheimer cut Block's price target to $110 from $115 while maintaining its outperform rating.

Block shares were down 16% in recent trading.

Price: 69.37, Change: -13.67, Percent Change: -16.46