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
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.