Has Block’s Share Price Slump Created an Opportunity in 2025?

• If you have been wondering whether Block is a beaten down bargain or a value trap, you are not alone. This article is going to walk through the numbers with you.
• After falling to around $60.11, Block is down roughly 7.6% over the last week and 19.1% over the past month, extending a tough run that leaves it about 39.2% lower over the last year and 71.0% below its 5 year level.
• Recent headlines have focused on Block doubling down on its Cash App ecosystem and expanding its Bitcoin related features, while regulators continue to scrutinize the broader payments and fintech space. At the same time, sentiment around high growth, unprofitable tech names has cooled, which helps explain why the stock has struggled even as digital payments keep gaining ground.
• On our checks, Block earns a valuation score of 3 out of 6, suggesting it looks undervalued on some metrics but not across the board. Next we will break down those different valuation approaches before finishing with a more holistic way to judge what the stock is really worth.

Find out why Block's -39.2% return over the last year is lagging behind its peers.

Approach 1: Block Excess Returns Analysis

The Excess Returns model looks at how much profit Block can generate above the return that shareholders require on their equity, and then capitalizes those surplus profits into an intrinsic value per share.

For Block, the model starts with a Book Value of $36.94 per share and a Stable EPS of $3.91 per share, based on weighted future Return on Equity estimates from 8 analysts. The Average Return on Equity is 9.33%, while the Cost of Equity is estimated at $3.25 per share, implying an Excess Return of $0.66 per share that Block is expected to earn over and above investors’ required return.

These excess returns are projected on a Stable Book Value of $41.90 per share, also informed by analyst forecasts, and then aggregated to arrive at the model’s intrinsic value estimate of about $56.52 per share. With the shares recently trading around $60.11, the Excess Returns valuation implies the stock is roughly 6.4% overvalued, which is a relatively small gap.

Result: ABOUT RIGHT

Block is fairly valued according to our Excess Returns, but this can change at a moment's notice. Track the value in your watchlist or portfolio and be alerted on when to act.

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Block.

Approach 2: Block Price vs Earnings

For a company like Block that is now generating positive earnings, the price to earnings ratio is a useful way to gauge how much investors are willing to pay for each dollar of profit. In general, faster growing and less risky businesses tend to justify a higher, or more generous, PE multiple, while slower or riskier names should trade on a lower one.

Block currently trades on a PE of 11.65x, which is below both the Diversified Financial industry average of about 13.72x and the wider peer group average of roughly 59.12x. Those comparisons suggest the market is assigning Block a discount despite its growth profile. Simply Wall St’s Fair Ratio framework goes a step further by estimating what PE multiple Block should trade on, based on its earnings growth prospects, profit margins, risk profile, industry and market capitalization. On this basis, Block’s Fair Ratio comes out at 18.79x, meaning the stock trades well below what this more tailored model implies is reasonable.

Result: UNDERVALUED

PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1440 companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your Block Narrative

Earlier we mentioned that there is an even better way to understand valuation, so let us introduce you to Narratives, a simple way to connect the story you believe about Block with a clear financial forecast and a fair value estimate. A Narrative is your own version of the Block story, where you spell out how you think revenue, earnings and margins will evolve, and those assumptions then flow directly into a projected fair value that you can compare with today’s share price to help assess whether the stock looks buyable, holdable or a candidate to sell. On Simply Wall St’s Community page, millions of investors use Narratives as an easy, accessible tool that automatically refreshes when new information, like earnings, guidance or major news, comes in. For example, one Block Narrative might lean bullish, assuming analysts’ higher-end outcomes and a fair value close to $104, while another, more cautious Narrative might anchor on the low-end expectations and a fair value closer to $35, giving you a transparent range of perspectives to benchmark your own view against.

Do you think there's more to the story for Block? Head over to our Community to see what others are saying!

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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