Block (XYZ, Financial) is set to announce its fiscal first-quarter results following the market close on Thursday, May 1, with an earnings call scheduled for 5:00 pm EDT. During its previous earnings call, Block projected a Q1 gross profit of $2.32 billion, reflecting an 11% increase from the previous year, alongside an adjusted operating income of $430 million.
Looking forward, Block has expressed optimism for sustained growth, particularly with its Cash App, and aims to achieve a "Rule of 40" run rate by the end of 2025, progressing toward its 2026 target. The company anticipates FY25 gross profits reaching $10.22 billion, marking 15% growth year-over-year, and adjusted operating income of $2.1 billion.
Consensus estimates for Block's Q1 earnings per share and revenue stand at 94 cents and $6.18 billion, respectively. For FY25, forecasts project an EPS of $4.35 and revenue of $26.21 billion. Recently, several analysts have adjusted their price targets for Block, reflecting ongoing uncertainty in the market. KeyBanc and Bernstein have both lowered their target prices, citing challenges such as stable but decelerating spending volumes and complex e-commerce dynamics influenced by tariffs.
Despite these adjustments, analysts remain generally optimistic about Block's potential, with the company focused on expanding its market presence and enhancing product offerings to drive future growth.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 40 analysts, the average target price for Block Inc (XYZ, Financial) is $100.64 with a high estimate of $125.00 and a low estimate of $57.00. The average target implies an upside of 69.71% from the current price of $59.30. More detailed estimate data can be found on the Block Inc (XYZ) Forecast page.
Based on the consensus recommendation from 45 brokerage firms, Block Inc's (XYZ, Financial) average brokerage recommendation is currently 2.0, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Block Inc (XYZ, Financial) in one year is $91.72, suggesting a upside of 54.67% from the current price of $59.3. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Block Inc (XYZ) Summary page.
XYZ Key Business Developments
Release Date: February 20, 2025
- Gross Profit: $8.89 billion in 2024, 18% year-over-year growth.
- Square Gross Profit: 15% year-over-year growth.
- Cash App Gross Profit: 21% year-over-year growth.
- Square GPV Growth: 10% year-over-year in Q4 2024.
- Cash App Paycheck Deposit Actives: 2.5 million in December, 25% year-over-year growth.
- Adjusted EBITDA: $3.03 billion, 69% year-over-year increase.
- Adjusted Operating Income: $1.61 billion, more than 4.5x year-over-year increase.
- Adjusted Free Cash Flow: $2.07 billion for 2024, up from $515 million in 2023.
- Rule of 40: Achieved 36.5% in 2024, up 7 points from the previous year.
- Cash App Borrow Monthly Actives: 5 million at the end of 2024.
- 2025 Gross Profit Guidance: At least 15% year-over-year growth, targeting $10.22 billion.
- 2025 Adjusted Operating Income Guidance: $2.1 billion, approximately 21% margin.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Block Inc (XYZ, Financial) reported a significant gross profit growth of 18% year-over-year, reaching $8.89 billion in 2024.
- Cash App's financial services offerings were enhanced, with paycheck deposit actives growing 25% year-over-year to 2.5 million in December.
- The company achieved a substantial increase in profitability, with adjusted EBITDA rising 69% year-over-year to $3.03 billion.
- Block Inc (XYZ) maintained a strong gross profit retention of over 100% for both Square and Cash App.
- The company is investing in AI automation, open source innovation, and Bitcoin infrastructure to expand financial access globally.
Negative Points
- Cash App monthly active users have been relatively flat at around 57 million, with only a 2% year-over-year growth.
- The company faces headwinds from foreign exchange rates, impacting gross profit growth by 50 basis points.
- Square GPV growth is expected to be in the high single digits in Q1 2025, with some noise due to FX and leap year effects.
- There are tougher comparisons for Square Banking and Bitcoin pricing changes, affecting growth dynamics in early 2025.
- The company is absorbing incremental costs from increased marketing and acquisition spend, which may impact short-term profitability.
