Update shared on 21 Nov 2025
What has happened since September?
Share price fell after the Q3 earnings missed expectations, even though the business is doing better.
Gross profit growth sped up, guidance went up, and the regulatory concerns was settled. It appears the market reacted with a negative sentiment over a revenue miss and ignored everything else.
- Earnings miss: $0.54 vs $0.63 expected
- But gross profit grew 18% (faster than Q2's 14%)
- Paid $120M to regulators
- Raised full-year guidance
- Started making money from Bitcoin mining hardware
- Now trading at ~13x earnings instead of 16-17x
The story today
Block got 20% cheaper since September, while actually getting better. The Q3 miss created a panic, but the market is appearing blindsided by these details:
- Gross profit growth is accelerating
- They settled the regulatory concerns ($120M USD)
- They raised guidance
- Net income doubled
- Cash App is doing very well
Block is executing well with gross profit speeding up and margins expanding.
As of today at $62, the market's pricing in short-term disaster. The data says otherwise, showing accelerating growth and better profits.
Currently, it appears to be well-priced if you are looking to invest in Block.
Disclaimer
PTrain is an employee of Simply Wall St, but has written this narrative in their capacity as an individual investor. PTrain holds no position in NYSE:XYZ. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. This narrative is general in nature and explores scenarios and estimates created by the author. The narrative does not reflect the opinions of Simply Wall St, and the views expressed are the opinion of the author alone, acting on their own behalf. These scenarios are not indicative of the company's future performance and are exploratory in the ideas they cover. The fair value estimate's are estimations only, and does not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that the author's analysis may not factor in the latest price-sensitive company announcements or qualitative material.