| Snowflake Score | |
|---|---|
| Valuation | 2/6 |
| Future Growth | 5/6 |
| Past Performance | 3/6 |
| Financial Health | 5/6 |
| Dividends | 0/6 |
SQ Stock Overview
Block, Inc., together with its subsidiaries, creates tools that enables sellers to accept card payments and provides reporting and analytics, and next-day settlement.
Rewards
Risk Analysis
Block Competitors
Price History & Performance
| Historical stock prices | |
|---|---|
| Current Share Price | US$118.10 |
| 52 Week High | US$289.23 |
| 52 Week Low | US$117.81 |
| Beta | 2.29 |
| 1 Month Change | -29.44% |
| 3 Month Change | -53.33% |
| 1 Year Change | -47.01% |
| 3 Year Change | 51.47% |
| 5 Year Change | 712.80% |
| Change since IPO | 803.60% |
Recent News & Updates
Block: AfterPay Is Just What The Dr. Ordered
In August of 2021, Block announced its plan to acquire AfterPay, an Australian buy-now, pay later company that also has a presence in the U.S. AfterPay has a strong brand and will add millions of consumers and thousands of merchants to Block’s already large ecosystem of Cash App users and Square Sellers. I am bullish on Block’s acquisition of AfterPay because it will bring a consumer lending component to Cash App and the Square Seller ecosystem. AfterPay brings one of the most recognizable BNPL brands to Block, but Block will need to rejuvenate its risk modeling and improve its culture to create sustainable consumer lending protocols.
Block, Inc. - A 2021 Pullback After A 2020 Parabolic Increase Sets The Stage For A Healthy Entry Point
Block, Inc. enjoyed a parabolic increase in price-per-share during 2020, only to give back some of those gains in 2021. Block, Inc. [formerly, Square, Inc.] changed its name, following the name change and rebranding action taken by Meta Platforms, Inc. [formerly, Facebook, Inc.]. Sentiment is, generally, unfavorable for Block, Inc., but I sometimes like to apply a “Dogs of the DOW” approach when deciding to “nibble” a few shares for an entry point. There appears to be a powerful Tax Loss Selling – January Effect sequence, that has concluded, suggesting a favorable entry price-per-share. I recommend a modest entry-level position in Block, Inc., at least for a January Effect “bounce.”.
Block, Formerly Square, May Have Further To Fall
Block faces both macro and comparable headwinds in 2022 as peers look more attractive. The technical chart shows that a short-term rebound attempt has failed to materialize. Options traders see the stock trading below $160 through March.
Block’s (NYSE:SQ) Valuation is Starting to Look Attractive - but Volatility Likely to Continue
Shares of Block, Inc. (NYSE:SQ), formerly Square, have remained under pressure despite the fact that Jack Dorsey is now devoting more time to the company. On November 28th Dorsey announced that he was leaving Twitter, and a few days later it was announced that Square was changing its name to Block, Inc. Since then the share price has fallen 25%, and it is now down 43% since the August high.
Shareholder Returns
| SQ | US IT | US Market | |
|---|---|---|---|
| 7D | -11.4% | -6.6% | -6.1% |
| 1Y | -47.0% | -9.4% | 4.2% |
Return vs Industry: SQ underperformed the US IT industry which returned -6.6% over the past year.
Return vs Market: SQ underperformed the US Market which returned 6.6% over the past year.
Price Volatility
| SQ volatility | |
|---|---|
| SQ Average Weekly Movement | 6.7% |
| IT Industry Average Movement | 8.2% |
| Market Average Movement | 6.7% |
| 10% most volatile stocks in US Market | 15.6% |
| 10% least volatile stocks in US Market | 2.4% |
Stable Share Price: SQ is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 7% a week.
Volatility Over Time: SQ's weekly volatility (7%) has been stable over the past year.
About the Company
| Founded | Employees | CEO | Website |
|---|---|---|---|
| 2009 | 5,477 | Jack Dorsey | https://www.squareup.com |
Block, Inc., together with its subsidiaries, creates tools that enables sellers to accept card payments and provides reporting and analytics, and next-day settlement. It provides hardware products, including Magstripe reader, which enables swiped transactions of magnetic stripe cards; Contactless and chip reader that accepts Europay, MasterCard, and Visa (EMV) chip cards and Near Field Communication payments; Square Stand, which enables an iPad to be used as a payment terminal or full point of sale solution; Square Register that combines its hardware, point-of-sale software, and payments technology; Square Terminal, a payments device and receipt printer to replace traditional keypad terminals, which accepts tap, dip, and swipe payments. The company also offers various software products, including Square Point of Sale; Square Appointments; Square for Retail; Square for Restaurants; Square Online and Square Online Checkout; Square Invoices; Square Virtual Terminal; Square Team Management; Square Contracts; Square Loyalty, Marketing, and Gift Cards; and Square Dashboard.
Block Fundamentals Summary
| SQ fundamental statistics | |
|---|---|
| Market Cap | US$54.91b |
| Earnings (TTM) | US$537.07m |
| Revenue (TTM) | US$16.74b |
102.2x
P/E Ratio3.3x
P/S RatioIs SQ overvalued?
See Fair Value and valuation analysisEarnings & Revenue
| SQ income statement (TTM) | |
|---|---|
| Revenue | US$16.74b |
| Cost of Revenue | US$12.69b |
| Gross Profit | US$4.05b |
| Expenses | US$3.52b |
| Earnings | US$537.07m |
Last Reported Earnings
Sep 30, 2021
Next Earnings Date
n/a
| Earnings per share (EPS) | 1.16 |
| Gross Margin | 24.21% |
| Net Profit Margin | 3.21% |
| Debt/Equity Ratio | 182.0% |
How did SQ perform over the long term?
See historical performance and comparisonValuation
Is Block undervalued compared to its fair value and its price relative to the market?
40.1%
Undervalued compared to fair value
Share Price vs. Fair Value
Below Fair Value: SQ ($118.1) is trading below our estimate of fair value ($197.18)
Significantly Below Fair Value: SQ is trading below fair value by more than 20%.
Price To Earnings Ratio
PE vs Industry: SQ is poor value based on its PE Ratio (102.2x) compared to the US IT industry average (32.6x).
PE vs Market: SQ is poor value based on its PE Ratio (102.2x) compared to the US market (16.7x).
Price to Earnings Growth Ratio
PEG Ratio: SQ is poor value based on its PEG Ratio (3.2x)
Price to Book Ratio
PB vs Industry: SQ is overvalued based on its PB Ratio (18.6x) compared to the US IT industry average (4.3x).
Future Growth
How is Block forecast to perform in the next 1 to 3 years based on estimates from 32 analysts?
31.8%
Forecasted annual earnings growth
Earnings and Revenue Growth Forecasts
Analyst Future Growth Forecasts
Earnings vs Savings Rate: SQ's forecast earnings growth (31.8% per year) is above the savings rate (2%).
Earnings vs Market: SQ's earnings (31.8% per year) are forecast to grow faster than the US market (13.1% per year).
High Growth Earnings: earnings are expected to grow significantly over the next 3 years.
Revenue vs Market: SQ's revenue (15.2% per year) is forecast to grow faster than the US market (9.2% per year).
High Growth Revenue: SQ's revenue (15.2% per year) is forecast to grow slower than 20% per year.
Earnings per Share Growth Forecasts
Future Return on Equity
Future ROE: SQ's Return on Equity is forecast to be high in 3 years time (40%)
Past Performance
How has Block performed over the past 5 years?
72.9%
Historical annual earnings growth
Earnings and Revenue History
Quality Earnings: SQ has a large one-off gain of $244.2M impacting its September 30 2021 financial results.
Growing Profit Margin: SQ's current net profit margins (3.2%) are lower than last year (4.1%).
Past Earnings Growth Analysis
Earnings Trend: SQ has become profitable over the past 5 years, growing earnings by 72.9% per year.
Accelerating Growth: SQ's earnings growth over the past year (73.2%) exceeds its 5-year average (72.9% per year).
Earnings vs Industry: SQ earnings growth over the past year (73.2%) exceeded the IT industry 35.8%.
Return on Equity
High ROE: SQ's Return on Equity (17.8%) is considered low.
Financial Health
How is Block's financial position?
Financial Position Analysis
Short Term Liabilities: SQ's short term assets ($10.6B) exceed its short term liabilities ($5.5B).
Long Term Liabilities: SQ's short term assets ($10.6B) exceed its long term liabilities ($5.4B).
Debt to Equity History and Analysis
Debt Level: SQ's net debt to equity ratio (2.8%) is considered satisfactory.
Reducing Debt: SQ had negative shareholder equity 5 years ago, but is now positive and has therefore improved.
Debt Coverage: SQ's debt is not well covered by operating cash flow (14.5%).
Interest Coverage: SQ's interest payments on its debt are well covered by EBIT (8.7x coverage).
Balance Sheet
Dividend
What is Block current dividend yield, its reliability and sustainability?
Dividend Yield vs Market
Notable Dividend: Unable to evaluate SQ's dividend yield against the bottom 25% of dividend payers, as the company has not reported any recent payouts.
High Dividend: Unable to evaluate SQ's dividend yield against the top 25% of dividend payers, as the company has not reported any recent payouts.
Stability and Growth of Payments
Stable Dividend: Insufficient data to determine if SQ's dividends per share have been stable in the past.
Growing Dividend: Insufficient data to determine if SQ's dividend payments have been increasing.
Current Payout to Shareholders
Dividend Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.
Future Payout to Shareholders
Future Dividend Coverage: No need to calculate the sustainability of SQ's dividend in 3 years as they are not forecast to pay a notable one for the US market.
Next Steps
Management
How experienced are the management team and are they aligned to shareholders interests?
5.4yrs
Average management tenure
CEO
Jack Dorsey (44 yo)
12.5yrs
Tenure
US$3
Compensation
Mr. Jack Dorsey Co-founded Block, Inc. (formerly known as Square, Inc.). in February 2009 and has been its Chief Executive Officer and President since July 2009. Mr. Dorsey Co-founded Twitter, Inc. in 2006...
CEO Compensation Analysis
Compensation vs Market: Jack's total compensation ($USD3.00) is below average for companies of similar size in the US market ($USD11.42M).
Compensation vs Earnings: Jack's compensation has been consistent with company performance over the past year.
Leadership Team
Experienced Management: SQ's management team is seasoned and experienced (5.4 years average tenure).
Board Members
Experienced Board: SQ's board of directors are considered experienced (7 years average tenure).
Ownership
Who are the major shareholders and have insiders been buying or selling?
Insider Trading Volume
Insider Buying: SQ insiders have only sold shares in the past 3 months.
Recent Insider Transactions
Ownership Breakdown
Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 3.1%.
Top Shareholders
Company Information
Block, Inc.'s employee growth, exchange listings and data sources
Key Information
- Name: Block, Inc.
- Ticker: SQ
- Exchange: NYSE
- Founded: 2009
- Industry: Data Processing and Outsourced Services
- Sector: Software
- Implied Market Cap: US$54.910b
- Shares outstanding: 464.94m
- Website: https://www.squareup.com
Number of Employees
Location
- Block, Inc.
- 1455 Market Street
- Suite 600
- San Francisco
- California
- 94103
- United States
Listings
Company Analysis and Financial Data Status
| Data | Last Updated (UTC time) |
|---|---|
| Company Analysis | 2022/01/21 23:51 |
| End of Day Share Price | 2022/01/21 00:00 |
| Earnings | 2021/09/30 |
| Annual Earnings | 2020/12/31 |
Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.