Fintech Block Inc (NYSE:SQ) is set to report fourth quarter financial results after market close Thursday.
Here’s an overview of analyst predictions, their insights before the quarterly report, and crucial points for investors to watch.
Earnings Estimates: Analysts expect Block to report fourth quarter revenue of $5.70 billion, according to data from Benzinga Pro.
The company reported revenue of $4.65 billion in last year's fourth quarter. Block has beaten analysts' estimates for revenue in the last six straight quarters.
Analysts expect Block to report earnings per share of 59 cents, compared to 22 cents in the prior year period. The company has beaten earnings per share estimates in three of the last four quarters and five of the last six quarters.
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What Analysts Are Saying: A focus on profitability could see Block terminate unprofitable businesses, Wedbush analyst Moshe Katri said in an investor note.
The analyst raised the rating from Neutral to Outperform on Block and raised the price target from $70 to $90.
Katri highlights commentary from Block management saying 2024 could be the company's "strongest year of profitability."
JPMorgan analyst Tien-Tsin Huang said Block could set its Rule of 40 targets to come in earlier than expected. The rule of 40 references sustainable profits with revenue growth and profit margins over the 40% level when combined.
The analyst has an Overweight rating and $90 price target.
Here are other recent analyst ratings and price targets on Block:
- Benchmark: Initiates with a Buy rating, $89 price target
- BTIG: Upgrades from Neutral to Buy, $85 price target
- Mizuho: Buy rating, raises price target from $90 to $99
Key Items to Watch: The earnings report comes after peer company PayPal Inc (NASDAQ:PYPL) recently reported quarterly results.
PayPal beat earnings and revenue estimates from analysts but saw shares fall after guidance came in weaker than expected and commentary from the company suggested a transition year.
Analysts and investors will likely be looking for positive commentary on growth and momentum for Block heading into 2024.
The company was reported to have layoffs of 10% of its workforce in January. Block previously said it would cap the number of people at the company at 12,000 until the growth of the business improved.
Another item to watch could be commentary on Block's Cash App unit, which was recently targeted with a report that federal regulators are looking into how the payments are used for terrorists. Commentary from the company in this aspect could be useful for investors and analysts to know if Cash App could be negatively impacted or see additional safeguards put in place.
SQ Price Action: Shares of Block trade at $63.99 versus a 52-week trading range of $38.85 to $83.08. Shares of Block are down 16% in the last year.
Read Next: Jack Dorsey’s Block Implements Major Layoffs, Reduces 10% Of Workforce Amid Broader Tech Industry Job Cuts: Report
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FAQs
Earnings Estimates: Analysts expect Block to report fourth quarter revenue of $5.70 billion, according to data from Benzinga Pro. The company reported revenue of $4.65 billion in last year's fourth quarter. Block has beaten analysts' estimates for revenue in the last six straight quarters.
What is the earnings prediction for Block Q4? ›
Block, Inc. SQ is scheduled to report fourth-quarter 2023 results on Feb 22. For the fourth quarter, the Zacks Consensus Estimate for revenues is pegged at $5.69 billion, suggesting a rise of 22.3% from the prior-year quarter's reported figure.
What is the rule of 40 Block? ›
Rule of 40 measures a company's combined growth and profit margin. Many venture capital and growth equity investors believe this ratio should exceed 40%, especially for software companies.
Will Block go back up? ›
Moving toward profitability
The operating loss was smaller in 2023 than in 2022, and it eked out a small net profit in 2023. Gross margin is expanding. If Block continues to demonstrate progress, investors are likely to reward Block stock with gains. And there's a good chance that can happen over the next year.
What is the earnings of sq Q4? ›
SQ Stock: Q4 Financial Results
Also, Square said net revenue came in at $5.77 billion, including Cash App transactions for bitcoin. SQ stock analysts had predicted revenue of $5.69 billion. On the stock market today, SQ stock popped 18.5% to 80.57 in afternoon action.
What is the future of Block stock? ›
SQ Stock 12 Month Forecast
Based on 30 Wall Street analysts offering 12 month price targets for Block in the last 3 months. The average price target is $90.42 with a high forecast of $100.00 and a low forecast of $62.00. The average price target represents a 6.90% change from the last price of $84.58.
What is the forecast for Block stock? ›
Block Stock Forecast
The 37 analysts with 12-month price forecasts for Block stock have an average target of 86.22, with a low estimate of 46 and a high estimate of 106. The average target predicts an increase of 20.42% from the current stock price of 71.60.
What is the rule of 40 growth? ›
The Rule of 40 is a principle that states a software company's combined revenue growth rate and profit margin should equal or exceed 40%. SaaS companies above 40% are generating profit at a rate that's sustainable, whereas companies below 40% may face cash flow or liquidity issues.
How do you calculate the rule of 40? ›
The rule of 40 formula requires just two inputs, growth and profit margin. To calculate this metric, you simply add your growth in percentage terms plus your profit margin. For example, if your revenue growth is 15% and your profit margin is 20%, your rule of 40 number is 35% (15 + 20) which is below the 40% target.
What is the new rule of 40? ›
The Rule of 40 states that, at scale, the combined value of revenue growth rate and profit margin should exceed 40% for healthy SaaS companies.
It could be on the verge of a comeback. Following years of incredible price gains, Block (SQ 2.32%) shares have been in the doldrums. After peaking in 2021, the shares are now 66% off of their highs. That includes a 27% rise in 2023, just a tad more than the S&P 500.
Is Block Inc a buy or sell? ›
Block (ex Square)'s market capitalization is $43.58 B by 555.18 M shares outstanding. Is Block stock a Buy, Sell or Hold? Block stock has received a consensus rating of buy. The average rating score is and is based on 73 buy ratings, 20 hold ratings, and 3 sell ratings.
Is Block Inc undervalued? ›
Intrinsic Value. The intrinsic value of one SQ stock under the Base Case scenario is 84.66 USD. Compared to the current market price of 75.49 USD, Block Inc is Undervalued by 11%.
What is a good quarterly earnings growth? ›
Understand that 25% quarterly EPS growth is the minimum benchmark. The very best stocks will typically have gains of 50% to 100% or more.
What is quarterly earnings growth? ›
What Is Quarterly Revenue Growth? Quarterly revenue growth is an increase in a company's sales in one quarter compared to sales of a different quarter.
What is a company's quarterly earnings growth? ›
Quarterly revenue growth refers to an increase in the company's sales from one quarter to the next. The sales figure for the current quarter can be compared on a year-over-year basis or sequentially. A year-over-year basis is when the sales figures for Q4 of Year 1 is compared to the Q4 sales of Year 2.
Will Tesla Q4 earnings be good? ›
Tesla Q4 Earnings Call Casts Long Shadow
Tesla reported that Q4 earnings fell 40% to 71 cents per share. Meanwhile, quarterly revenue totaled $25.17 billion, up 3.5% vs. Q4 2022. Tesla's gross profit margin came in at 17.6%, down 612 basis points.
What are the earnings expectations for Block? ›
Block is forecast to grow earnings and revenue by 44.1% and 10% per annum respectively. EPS is expected to grow by 42.5% per annum. Return on equity is forecast to be 11.9% in 3 years.
Will Block stock go up? ›
Block Stock Forecast
Over the next 52 weeks, Block has on average historically risen by 58.4% based on the past 8 years of stock performance.
How much will Block stock price be in 2025? ›
Block stock price stood at $74.48
According to the latest long-term forecast, Block price will hit $85 by the end of 2024 and then $125 by the end of 2025. Block will rise to $150 within the year of 2027, $200 in 2030 and $250 in 2035.
