Did Winning Katz's Delicatessen Signal a New Phase for Block's (SQ) Omnichannel Strategy?

• Square announced that Katz's Delicatessen has selected Square's commerce platform to power both its in-store operations and expanding nationwide delivery, highlighting a unique integration of historic tradition with modern technology.
• This partnership underscores Square’s growing appeal to iconic food institutions, as it supports both busy local storefronts and large-scale e-commerce needs under one platform.
• We'll examine how winning Katz's Delicatessen as a high-profile client adds credibility to Block's upmarket and omnichannel expansion strategy.

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Block Investment Narrative Recap

To be a Block shareholder, you need to believe in its continued ability to drive profitable growth through omnichannel expansion and innovative fintech products, particularly amid digital transformation in commerce. While landing Katz's Delicatessen raises profile and strengthens Block’s upmarket ambitions, it does not materially shift the most important near-term catalyst, ongoing user growth and engagement within Cash App. The biggest risk remains rising competition and potential customer acquisition cost pressure, neither of which are substantially changed by this partnership.

Among recent developments, the announcement of Katz’s adoption of Square’s platform is closely aligned with Block’s recent client wins, such as Chip City Cookies and Groucho’s Deli, reflecting increased traction with larger and multi-location operators. This growing client base supports Block’s strategy to expand its Square ecosystem beyond traditional small businesses and could help temper the risk of slowing revenue growth in more established segments.

On the other hand, heightened competition and customer acquisition cost pressure are factors investors should watch as Block expands into new verticals...

Read the full narrative on Block (it's free!)

Block's outlook projects $32.8 billion in revenue and $2.4 billion in earnings by 2028. This forecast is based on 11.3% annual revenue growth but a $0.6 billion decrease in earnings from the current $3.0 billion.

Uncover how Block's forecasts yield a $87.17 fair value, a 13% upside to its current price.

Exploring Other Perspectives

Nineteen members of the Simply Wall St Community set Block's fair value between US$55.70 and US$104, showing a broad spectrum of opinion. With rising competition threatening future revenue growth, these contrasting outlooks underline the importance of exploring several perspectives.

Explore 19 other fair value estimates on Block - why the stock might be worth 27% less than the current price!

Build Your Own Block Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Block research is our analysis highlighting 3 key rewards and 2 important warning signs that could impact your investment decision.
• Our free Block research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Block's overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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