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Friday - UBS has adjusted its price target for Block Inc. (NYSE:SQ) shares, reducing it slightly from $98.00 to $97.00 while maintaining a Buy rating on the stock. According to InvestingPro data, Block currently trades at $72.51, with analysts’ targets ranging from $40 to $125. The decision follows Block’s financial guidance for fiscal year 2025, which anticipates an increase in gross profit growth for both its Square and Cash App services as the year progresses.
The firm’s analysis highlighted three critical factors that were anticipated ahead of the company’s results: Square’s Gross Payment Volume (GPV), the total company gross profit growth, and the number of Cash App Direct Deposit users. Block maintains strong financial health with a current ratio of 2.33 and revenue growth of 10.06% in the last twelve months. Notably, Square’s GPV saw a rise in Q4 to approximately 10% from 7.5% in the previous quarter. This growth was even more pronounced in the United States, where GPV accelerated to about 7% from roughly 5%.
For the first quarter of 2025, Block Inc. has guided Seller GPV to grow at a high single-digit rate, factoring out foreign exchange and leap year headwinds, which are estimated at 1% each. The company expects this growth to pick up speed throughout the year, aiming to exit at a low double-digit rate. This optimism is based on several initiatives that Block believes will bolster volume trends, including the completion of orders migration, go-to-market investments such as outbound sales representatives and new distribution partnerships, and new sales representative incentives that focus on profitable volume growth. These incentives began at the start of 2025 and are anticipated to drive further growth. With a 26.49% price return over the past six months and InvestingPro analysis suggesting the stock is currently undervalued, investors can access detailed valuation metrics and 10 additional ProTips through the comprehensive Pro Research Report.
In other recent news, Block Inc. reported its fourth-quarter 2024 earnings, which fell short of analyst expectations. The company recorded an earnings per share (EPS) of $0.71, missing the forecast of $0.86, and reported revenue of $6.03 billion, below the anticipated $6.24 billion. Despite these results, Block’s full-year gross profit grew by 18% year-over-year, reaching $8.89 billion, and adjusted EBITDA increased by 69% to $3.03 billion. Analysts have responded with varied outlooks; TD Cowen maintained a Buy rating with a $115 price target, citing confidence in Block’s long-term growth prospects. Meanwhile, RBC Capital Markets reiterated an Outperform rating with a $110 target, emphasizing the potential impact of product innovations like the new Afterpay-enabled Cash App Card. Conversely, Keefe, Bruyette & Woods lowered their price target to $87, maintaining a Market Perform rating due to Block’s weaker first-quarter guidance. The company remains optimistic about accelerating growth through strategic initiatives and investments in marketing and product development.
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