Cash App And Square Expansion Will Drive Fintech Amid Risks

Block’s consensus price target has been revised modestly downward as analysts weigh strong Q2 results and broad-based business momentum against rising concerns over the company’s growing reliance on lending products and potential credit risks, with the fair value decreasing from $86.88 to $85.02.

Analyst Commentary

• Bullish analysts cite Block’s Q2 earnings beat, with notable reacceleration in gross payment volume for Square and gross profit growth led by Cash App Borrow, BNPL, and Cash Card, as well as broad-based strength across business lines.
• Several firms highlight that valuation remains attractive, particularly post-S&P 500 inclusion, with improving liquidity and margin expansion supporting higher multiples.
• Bearish analysts are increasingly concerned about Block’s rising dependence on lending products (notably Cash App Borrow), warning this dependency increases working capital needs and potential credit losses, which could justify a lower valuation.
• Debate persists over whether Square’s gross profit growth is structurally sustainable; some analysts see positive inflections in large-volume cohorts and successful product cycles, while skeptics point to slowing user growth and intensifying competition.
• Macro and sector-specific risks are noted, including pressures from competition, fintech regulatory changes, and overall uncertainty in consumer spending and trade, though Bullish analysts argue Block remains a high-quality compounder amid these challenges.

What's in the News

• TD Cowen raised Block’s price target to $95 from $85 and maintained a Buy rating, citing strong Q2 performance with Cash App gross profit growth of 16% and improved Square GPV in both US and international markets (TD Cowen).
• Oppenheimer increased Block’s price target to $92 from $71, reaffirming an Outperform rating after Block delivered better-than-expected Q2 results in gross profit, adjusted operating income, and EBITDA, and provided above-consensus Q3 guidance and an improved 2025 outlook (Oppenheimer).
• JPMorgan will begin charging fintech companies, including Block, for access to customer bank account data later this year, which could impact costs for fintechs and possibly consumers (Bloomberg).
• Block’s recent financial outperformance is being driven by robust growth in Cash App features such as Borrow, BNPL, and Cash Card, as well as momentum in Square GPV fueled by distribution and product investments (TD Cowen).
• The raised full-year 2025 outlook following Q2 results suggests continued broad-based strength across Block’s platforms, reinforcing analysts’ confidence in Block’s future performance (Oppenheimer).

Valuation Changes

Summary of Valuation Changes for Block

• The Consensus Analyst Price Target has fallen slightly from $86.88 to $85.02.
• The Future P/E for Block has fallen slightly from 27.16x to 25.83x.
• The Net Profit Margin for Block remained effectively unchanged, moving only marginally from 7.21% to 7.26%.