Block: Don't Buy Yet, Wait For Confident Commentary In Q1 (Archive)
Tariffs cloud Block’s growth outlook despite Cash App features and healthy Square trends.
This 5-Minute Pitch was originally published on Seeking Alpha before the launch of the Hunting Alphas website. It is shared here to showcase my previous work and track record. New 5-Minute Pitches published on this site will not be disseminated anywhere else.
Elevator Pitch
- Block's Cash App performance has been underwhelming, but new features like borrowing and BNPL offer growth potential.
- The merchant-facing Square business is growing well, but tariffs present risks to gross payment volumes particularly in the food beverage retail industries.
- Tariffs also pose risks to management's FY25 gross profits growth guidance.
- Valuations are near relative fair value vs peers, but I lean a bit more cautious due to declining earnings expectations and borderline bearish technical signals.
- US Retail Sales data suggests limited positive surprises for Block's Q1 FY25, but potential upside in Q2 FY25 so far.
Read the full article here.
Disclosures and Disclaimers
Past performance ≠ future results. Not investment advice. See full Disclaimer.
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