DexCom earnings beat by $0.03, revenue topped estimates
On Monday, Wolfe Research updated its outlook on Block Inc. (NYSE: SQ), increasing the price target from $70.00 to $75.00 while maintaining an Outperform rating on the company’s shares. The adjustment comes in the wake of Block’s share performance, which has seen a 32% decline year-to-date, contrasting with the S&P 500’s 1% rise and the S&P Equal-Weighted Index’s 3% increase. Over the last 12 months, Block’s shares have fallen by 20%, while the S&P 500 has gained 11%.
Wolfe Research’s analysis indicates that the underperformance of Block’s stock is attributed to valuation multiples rather than company earnings, pointing out that Block’s adjusted net income has surged by 90%. Currently, Block’s shares are trading at a P/E ratio of 13.59, which is a discount compared to its historical medians over 1, 3, and 5 years. InvestingPro analysis shows the company maintains a GOOD financial health score of 2.79, supported by strong liquidity metrics and solid growth potential.
Despite the recent underperformance in the stock market, Wolfe Research sees potential in Block’s valuation. The firm notes that Block’s current trading multiple is at a 4.5 times discount relative to the market multiple of the S&P 500. This is slightly narrower than its 1-year median discount of 4.6 times but is significantly lower than its 3- and 5-year median premiums.
The revised year-end 2025 price target of $75 is based on a forward earnings multiple of 22-23 times Wolfe Research’s calendar year 2026 SBC-expensed EPS estimate of $3.31. This new price target suggests a more optimistic outlook for the financial technology company’s future earnings and market valuation. For a comprehensive analysis of Block’s valuation metrics, growth potential, and 10+ additional ProTips, explore the detailed Pro Research Report available on InvestingPro.
In other recent news, Block Inc. has experienced several significant developments. Fitch Ratings upgraded Block’s Long-Term Issuer Default Rating from ’BB+’ to ’BBB-’, citing the company’s significant growth and improved profitability. This upgrade affects approximately $5.8 billion of Block’s outstanding debt. In contrast, Macquarie analysts downgraded Block’s stock from Outperform to Neutral, slashing the price target to $50 from $110, due to disappointing financial performance and macroeconomic concerns. Seaport Global Securities also downgraded Block to Neutral, pointing to significant misses in key financial metrics, including gross profit and earnings per share.
Jefferies maintained a Buy rating for Block, with a price target of $60, noting an improvement in credit losses and a positive outlook on the company’s lending operations. Similarly, Needham adjusted its price target to $60 from $90, maintaining a Buy rating while acknowledging challenges in consumer spending and Cash App inflows. Despite these challenges, Needham sees potential for growth due to Block’s international performance and new product initiatives. These recent developments reflect a mixed outlook for Block, with varying analyst perspectives on its financial health and future prospects.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.