Block Inc (SQ)

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Earnings Preview: Block Inc. (NYSE: SQ)
By: 24/7 Wall St. | November 2, 2022

• Here is a preview of five companies set to report quarterly results after U.S. markets close on Thursday.

Block

Over the past 12 months, Block Inc. (NYSE: SQ) has seen its share price fall by almost 77%. The bleeding started last November, shortly after the company posted its 52-week high. Block gets high marks from analysts thanks to its Cash App digital wallet and its integration of recently acquired Afterpay, a buy-now-pay-later platform, into a broader e-commerce platform. A major remaining issue is whether the current weak economy will sink the company’s efforts.

Analysts remain mostly bullish on Block, with 29 of 43 brokerages having a Buy or Strong Buy rating. Another 11 rate the stock at Hold. At a recent price of $59.00 a share, the upside potential based on a median price target of $100.00 is 69.5%. At the high price of $210.00, the upside potential is 256%.

Third-quarter revenue is forecast at $4.47 billion, up 1.5% sequentially and by 16.4% year over year. Adjusted EPS are expected to come in at $0.23, up 27.5% sequentially but down 37.8% year over year. For the full 2022 fiscal year, estimates call for EPS of $0.85, down 50%, on sales of $17.54 billion, down 0.7%.

Square stock trades at about 69.1 times expected 2022 EPS, 38.3 times estimated 2023 earnings of $1.54 and 23.9 times estimated 2024 earnings of $2.46 per share. The stock’s 52-week trading range is $51.45 to $255.95. Square does not pay a dividend. The total shareholder return for the past year was negative 76.9%.

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