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Friday, July 05, 2024 11:45:14 AM
Bull of the Day: Block (SQ)
By: Zacks Investment Research | July 5, 2024
With the Q2 earnings season set to ramp up following the fourth of July holiday, Block (SQ) is a tech stock that looks poised for a rebound leading up to its quarterly results in early August.
The innovative provider of point of sales solutions (POS) appears to be overlooked as SQ has now fallen -26% from its 52-week high of $87 a share in March.
Still, the expansive growth Block was able to display in Q1 is thought to have continued and strong financial results can of course lead to upward momentum for stocks.
Keeping this scenario in mind, Block’s stock currently sports a Zacks Rank #1 (Strong Buy) and is the Bull of the Day.
Q2 Sneak Preview
Investors are always looking for stocks that are expected to post robust quarterly growth and improved financial fundamentals and Block is on this radar.
Another quarter of double-digit top and bottom-line growth appears to be in the cards with Q2 sales projected to rise 13% to $6.29 billion and EPS projections of $0.75 would reflect a 92% increase from $0.29 a share in the comparative quarter.
Block is becoming a staple of the new American economy
Notably, Cash app's popularity has been the primarily catalyst to Block’s expansion along with hardware POS offerings such as its patented Square Reader machines with the company having a comprehensive commerce suite that fuels entrepreneurship by helping sellers grow their businesses.
CEO Jack Dorsey has also strived for other routes to keep up Block’s relevance and expansion from acquiring hip-hop mogul Jay-Z’s tidal music platform in 2021 to offering crypto-related services. In addition to develping a full bitcoin mining system Block provides a Bitcoin Hardware Wallet which offers storage for bitcoin holders.
Loosely speaking, Block may be a more affordable option for investors seeking exposure to bitcoin than Coinbase (COIN Quick QuoteCOIN - Free Report) while being a safter choice in regards to other crypto miners such as Marathon Digital (MARA Quick QuoteMARA - Free Report) or Riot Platforms (RIOT Quick QuoteRIOT - Free Report) . That notion is only magnified when considering Block’s diverse business operations along with the fact that the price of Bitcoin has soared in the last year and currently sits over $60,000.
Price of Bitcoin
Image Source: Microsoft Bing via Refinitiv
Growth Trajectory
Overall, Blocks total sales are projected to increase 15% in fiscal 2024 and are slated to expand another 12% in FY25 to $28.22 billion. More impressive, annual earnings are now expected to soar 73% this year to $3.11 per share versus $1.80 a share in 2023. Plus, FY25 EPS is projected to climb another 30% to $4.04.
Better still, Block’s stock is trading at 20.7X forward earnings and at 1.7X sales which are much more reasonable valuations than the stretched premiums it has commanded in the past.
Bottom Line
Block is once again becoming one of the most appealing business services companies to invest in at the moment. While it may be too soon to call Block’s stock an absolute steal at current levels, a sharp rebound looks justified considering the company’s attractive growth trajectory and innovative business offerings.
Read Full Story »»»
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By: Zacks Investment Research | July 5, 2024
With the Q2 earnings season set to ramp up following the fourth of July holiday, Block (SQ) is a tech stock that looks poised for a rebound leading up to its quarterly results in early August.
The innovative provider of point of sales solutions (POS) appears to be overlooked as SQ has now fallen -26% from its 52-week high of $87 a share in March.
Still, the expansive growth Block was able to display in Q1 is thought to have continued and strong financial results can of course lead to upward momentum for stocks.
Keeping this scenario in mind, Block’s stock currently sports a Zacks Rank #1 (Strong Buy) and is the Bull of the Day.
Q2 Sneak Preview
Investors are always looking for stocks that are expected to post robust quarterly growth and improved financial fundamentals and Block is on this radar.
Another quarter of double-digit top and bottom-line growth appears to be in the cards with Q2 sales projected to rise 13% to $6.29 billion and EPS projections of $0.75 would reflect a 92% increase from $0.29 a share in the comparative quarter.
Block is becoming a staple of the new American economy
Notably, Cash app's popularity has been the primarily catalyst to Block’s expansion along with hardware POS offerings such as its patented Square Reader machines with the company having a comprehensive commerce suite that fuels entrepreneurship by helping sellers grow their businesses.
CEO Jack Dorsey has also strived for other routes to keep up Block’s relevance and expansion from acquiring hip-hop mogul Jay-Z’s tidal music platform in 2021 to offering crypto-related services. In addition to develping a full bitcoin mining system Block provides a Bitcoin Hardware Wallet which offers storage for bitcoin holders.
Loosely speaking, Block may be a more affordable option for investors seeking exposure to bitcoin than Coinbase (COIN Quick QuoteCOIN - Free Report) while being a safter choice in regards to other crypto miners such as Marathon Digital (MARA Quick QuoteMARA - Free Report) or Riot Platforms (RIOT Quick QuoteRIOT - Free Report) . That notion is only magnified when considering Block’s diverse business operations along with the fact that the price of Bitcoin has soared in the last year and currently sits over $60,000.
Price of Bitcoin
Image Source: Microsoft Bing via Refinitiv
Growth Trajectory
Overall, Blocks total sales are projected to increase 15% in fiscal 2024 and are slated to expand another 12% in FY25 to $28.22 billion. More impressive, annual earnings are now expected to soar 73% this year to $3.11 per share versus $1.80 a share in 2023. Plus, FY25 EPS is projected to climb another 30% to $4.04.
Better still, Block’s stock is trading at 20.7X forward earnings and at 1.7X sales which are much more reasonable valuations than the stretched premiums it has commanded in the past.
Bottom Line
Block is once again becoming one of the most appealing business services companies to invest in at the moment. While it may be too soon to call Block’s stock an absolute steal at current levels, a sharp rebound looks justified considering the company’s attractive growth trajectory and innovative business offerings.
Read Full Story »»»
DiscoverGold
Information posted to this board is not meant to suggest any specific action, but to point out the technical signs that can help our readers make their own specific decisions. Caveat emptor!
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