Block (NYSE:SQ) - Share price, News & Analysis

SQ fundamental analysis
Snowflake Score
Valuation	3/6
Future Growth	4/6
Past Performance	0/6
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

Trading at 68.8% below our estimate of its fair value

Earnings are forecast to grow 110.64% per year

Risk Analysis

Volatile share price over the past 3 months

Significant insider selling over the past 3 months

Shareholders have been diluted in the past year

Block Competitors

Visa

NYSE:V

US$422.1b

Mastercard

NYSE:MA

US$331.4b

Fiserv

NasdaqGS:FISV

US$62.6b

Fidelity National Information Services

NYSE:FIS

US$61.4b

Price History & Performance

Summary of all time highs, changes and price drops for Block
Historical stock prices
Current Share Price	US$75.88
52 Week High	US$289.23
52 Week Low	US$65.10
Beta	2.37
1 Month Change	-26.09%
3 Month Change	-14.47%
1 Year Change	-64.90%
3 Year Change	15.28%
5 Year Change	233.69%
Change since IPO	480.57%

Recent News & Updates

May 13

Despite the Negative Revisions, Block, Inc. (NYSE:SQ) has Large Future Potential

Block, Inc. (NYSE:SQ) is on the receiving end of market turbulence as the stock has declined some 12% from the day on the earnings announcement. We will review how the company performed, and what do analysts expect in the future.

May 12

Block Q1: Making Strides, Still Winning, Lots To Come

Last week, Block reported its first-quarter results, missing GPV, total revenues, and bottom-line EPS, but that doesn't necessarily tell the entire story for Block. In Q1, Block's $29B acquisition of Afterpay went through and Afterpay contributed to Block's results for the months of February and March. Cash App continued to see strong growth, which was highlighted by its strongest month of active users transacting on average 21 times. Cash Card also grew gross profits by 50% on a year-over-year basis, while more than 1.5M people filed their taxes through Cash App.

Shareholder Returns

	SQ	US IT	US Market
7D	-10.5%	-2.3%	-4.0%
1Y	-64.9%	-29.2%	-13.2%

Return vs Industry: SQ underperformed the US IT industry which returned -27.5% over the past year.

Return vs Market: SQ underperformed the US Market which returned -12.3% over the past year.

Price Volatility

Is SQ's price volatile compared to industry and market?
SQ volatility
SQ Average Weekly Movement	14.3%
IT Industry Average Movement	10.0%
Market Average Movement	7.8%
10% most volatile stocks in US Market	16.8%
10% least volatile stocks in US Market	2.9%

Stable Share Price: SQ is more volatile than 75% of US stocks over the past 3 months, typically moving +/- 14% a week.

Volatility Over Time: SQ's weekly volatility (14%) has been stable over the past year, but is still higher than 75% of US stocks.

About the Company

Founded	Employees	CEO	Website
2009	8,521	n/a	https://www.block.xyz

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

How do Block's earnings and revenue compare to its market cap?
SQ fundamental statistics
Market Cap	US$44.05b
Earnings (TTM)	-US$76.92m
Revenue (TTM)	US$16.56b

2.7x

P/S Ratio

-572.6x

P/E Ratio

Is SQ overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
SQ income statement (TTM)
Revenue	US$16.56b
Cost of Revenue	US$11.81b
Gross Profit	US$4.75b
Other Expenses	US$4.83b
Earnings	-US$76.92m

Last Reported Earnings

Mar 31, 2022

Next Earnings Date

Aug 04, 2022

Earnings per share (EPS)	-0.13
Gross Margin	28.68%
Net Profit Margin	-0.46%
Debt/Equity Ratio	26.9%

How did SQ perform over the long term?

See historical performance and comparison

Valuation

Is Block undervalued compared to its fair value and its price relative to the market?

Valuation Score

3/6

Valuation Score 3/6

Below Fair Value
Significantly Below Fair Value
PE vs Industry
PE vs Market
PEG Ratio
PB vs Industry

>50%

Undervalued compared to fair value

Share Price vs. Fair Value

Below Fair Value: SQ ($75.88) is trading below our estimate of fair value ($243.17)

Significantly Below Fair Value: SQ is trading below fair value by more than 20%.

Price To Earnings Ratio

PE vs Industry: SQ is unprofitable, so we can't compare its Price-To-Earnings Ratio to the US IT industry average.

PE vs Market: SQ is unprofitable, so we can't compare its Price-To-Earnings Ratio to the US market.

Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate SQ's PEG Ratio to determine if it is good value.

Price to Book Ratio

PB vs Industry: SQ is good value based on its Price-To-Book Ratio (2.5x) compared to the US IT industry average (3.1x).

Future Growth

How is Block forecast to perform in the next 1 to 3 years based on estimates from 40 analysts?

Future Growth Score

4/6

Future Growth Score 4/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

110.6%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: SQ is forecast to become profitable over the next 3 years, which is considered faster growth than the savings rate (1.9%).

Earnings vs Market: SQ is forecast to become profitable over the next 3 years, which is considered above average market growth.

High Growth Earnings: SQ's is expected to become profitable in the next 3 years.

Revenue vs Market: SQ's revenue (18% per year) is forecast to grow faster than the US market (7.8% per year).

High Growth Revenue: SQ's revenue (18% 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 low in 3 years time (6.2%).

Past Performance

How has Block performed over the past 5 years?

Past Performance Score

0/6

Past Performance Score 0/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

53.8%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: SQ is currently unprofitable.

Growing Profit Margin: SQ is currently unprofitable.

Past Earnings Growth Analysis

Earnings Trend: SQ is unprofitable, but has reduced losses over the past 5 years at a rate of 53.8% per year.

Accelerating Growth: Unable to compare SQ's earnings growth over the past year to its 5-year average as it is currently unprofitable

Earnings vs Industry: SQ is unprofitable, making it difficult to compare its past year earnings growth to the IT industry (21.4%).

Return on Equity

High ROE: SQ has a negative Return on Equity (-0.5%), as it is currently unprofitable.

Financial Health

How is Block's financial position?

Financial Health Score

5/6

Financial Health Score 5/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: SQ's short term assets ($11.9B) exceed its short term liabilities ($6.0B).

Long Term Liabilities: SQ's short term assets ($11.9B) exceed its long term liabilities ($5.6B).

Debt to Equity History and Analysis

Debt Level: SQ has more cash than its total debt.

Reducing Debt: SQ's debt to equity ratio has reduced from 55% to 26.9% over the past 5 years.

Debt Coverage: SQ's debt is well covered by operating cash flow (23.6%).

Interest Coverage: Insufficient data to determine if SQ's interest payments on its debt are well covered by EBIT.

Balance Sheet

Dividend

What is Block current dividend yield, its reliability and sustainability?

Dividend Score

0/6

Dividend Score 0/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Future Dividend Coverage

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.

Earnings Payout to Shareholders

Earnings Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: Unable to calculate sustainability of dividends as SQ has not reported any payouts.

Discover strong dividend paying companies

Management

How experienced are the management team and are they aligned to shareholders interests?

5.0yrs

Average management tenure

CEO

Block has no CEO, or we have no data on them.

Leadership Team

Experienced Management: SQ's management team is considered experienced (5 years average tenure).

Board Members

Experienced Board: SQ's board of directors are considered experienced (7.3 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 27.5%.

Data	Last Updated (UTC time)
Company Analysis	2022/05/24 00:00
End of Day Share Price	2022/05/24 00:00
Earnings	2022/03/31
Annual Earnings	2021/12/31