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SQ

BlockNYSE:SQ Stock Report

Last Price

US$118.10

Market Cap

US$54.9b

7D

-11.4%

1Y

-47.0%

Updated

21 Jan, 2022

Data

Company Financials +
SQ fundamental analysis
Snowflake Score
Valuation2/6
Future Growth5/6
Past Performance3/6
Financial Health5/6
Dividends0/6

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.

Block Competitors

Visa

NYSE:V

US$434.2b

Mastercard

NYSE:MA

US$348.9b

PayPal Holdings

NasdaqGS:PYPL

US$192.1b

Fidelity National Information Services

NYSE:FIS

US$68.1b

Price History & Performance

Summary of all time highs, changes and price drops for Block
Historical stock prices
Current Share PriceUS$118.10
52 Week HighUS$289.23
52 Week LowUS$117.81
Beta2.29
1 Month Change-29.44%
3 Month Change-53.33%
1 Year Change-47.01%
3 Year Change51.47%
5 Year Change712.80%
Change since IPO803.60%

Recent News & Updates

Jan 20

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.

Jan 03

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.”.

Dec 23

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.

Dec 21
Block’s (NYSE:SQ) Valuation is Starting to Look Attractive - but Volatility Likely to Continue

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

SQUS ITUS 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

Is SQ's price volatile compared to industry and market?
SQ volatility
SQ Average Weekly Movement6.7%
IT Industry Average Movement8.2%
Market Average Movement6.7%
10% most volatile stocks in US Market15.6%
10% least volatile stocks in US Market2.4%

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

FoundedEmployeesCEOWebsite
20095,477Jack Dorseyhttps://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


Earnings & Revenue

Key profitability statistics from the latest earnings report
SQ income statement (TTM)
RevenueUS$16.74b
Cost of RevenueUS$12.69b
Gross ProfitUS$4.05b
ExpensesUS$3.52b
EarningsUS$537.07m

Last Reported Earnings

Sep 30, 2021

Next Earnings Date

n/a

Earnings per share (EPS)1.16
Gross Margin24.21%
Net Profit Margin3.21%
Debt/Equity Ratio182.0%

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?

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

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2022/01/21 23:51
End of Day Share Price2022/01/21 00:00
Earnings2021/09/30
Annual Earnings2020/12/31


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.