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.
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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."
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