Block (XYZ) stock is down Friday after the payments company missed top- and bottom-line expectations for its fourth quarter.
In the three months ending December 31, Block's revenue increased 4.5% year over year to $6 billion. Earnings per share (EPS) rose 51.1% from the year-ago period to 71 cents.
"We expanded Square from a payments tool into a full commerce platform, enhanced Cash App's financial services offerings, and restructured our organization to move faster against our roadmap," said Block CEO Jack Dorsey in prepared remarks.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
The CEO added that Block is "focused on connecting local communities—block-by-block—through our 'neighborhood network' strategy." Dorsey said Block will continue to invest in "AI automation, open-source innovation, and bitcoin infrastructure" to expand "financial access globally."
Block's gross payment volume (GPV) for its Square unit increased 10% year over year to $58.9 billion in the quarter and total Cash App inflows increased 12.1% to $71.1 billion.
The results came up short of analysts' expectations. Wall Street was anticipating revenue of $6.3 billion and earnings of 87 cents per share, according to CNBC.
For 2025, Block said it expects to achieve gross profit growth of at least 15% from 2024 as well as approximately $2.1 billion in adjusted operating income with margin expansion.
"We spent the last year looking critically at our organization and making changes so we can build much faster," Dorsey said. "Most of that work is now complete, and we're looking forward to proving it this year."
Is Block stock a buy, sell or hold?
Block stock looks good relative to the S&P 500 based on total returns for the trailing 12 months, with a gain of 26.3% vs 24.6% for the index. And Wall Street remains bullish on the fintech company.
According to S&P Global Market Intelligence, the average analyst target price for XYZ stock is $98.76, representing upside of more than 36% from current levels. And the consensus recommendation is Buy.
Financial services firm Oppenheimer reiterated its Outperform rating (equivalent to a Buy) and $110 price target following the earnings release.
"Square's GPV growth should accelerate through efforts like expanding U.S. sales teams, boosting international sales presence, and increasing partnerships," wrote Oppenheimer analyst Rayna Kumar in a note.
Kumar concluded that "Block is well-positioned for share gains, with growing monetization of its products and the still-low penetration of its total addressable market."
Related Content
-
The Surprising Truth About Loneliness and LongevityWe've all heard about the epidemic of loneliness that can shorten lives and make retirement miserable. But there's more to the story.
-
The Dollar Index Is Sliding. Is Your Portfolio Prepared?The Dollar Index Is Sliding. Is Your Portfolio Prepared? The dollar's fall has been troubling because inflation appears to be constrained and the economy has been strong. Here's what it means for investors.
-
The Dollar Index Is Sliding. Is Your Portfolio Prepared?
The Dollar Index Is Sliding. Is Your Portfolio Prepared? The dollar's fall has been troubling because inflation appears to be constrained and the economy has been strong. Here's what it means for investors.
-
Seven Financial Considerations When Downsizing for RetirementWith prices going up on everything, you may be looking for a cheaper place to live. To truly evaluate costs, take a hard look at taxes and intangibles.
-
I Have Plenty of Money: Why Do I Need a Long-Term Care Plan?Long-term care planning, whether through insurance or self-funding, is crucial not only for financial protection but also to preserve family relationships and reduce the emotional and logistical burdens on loved ones.
-
The GENIUS, CLARITY, and Anti-CBDC Acts: What Bitcoin Investors Need to KnowMovement on the crypto front at the federal level has the potential to usher in substantial change. Here's what it means for your portfolio.
-
Wellness Stocks to Invest in NowBreakthroughs that help us live longer, healthier lives can also create opportunities for investors.
-
Three Steps for Evaluating a Downsize in Retirement: A Financial Planner's GuideUnless you think things through, you could end up with major (and costly) regrets. To make the right choice, base it on the three keys to retirement happiness.
-
Worried About Your Retirement Income? Four Questions to Ask Yourself, From a Financial PlannerIf you're nearing or in retirement and stressing about your retirement income (so many of us are), consider taking some time to think about these four issues.
-
Stock Market Today: Stocks Step Back From New HighsInvestors, traders and speculators continue the low-volume summer grind against now-familiar uncertainties.
