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
-
Early Tax Refund Options Could Trap Your CashTax Refunds Don’t be fooled into thinking you’re not getting a loan — because you really are.
-
UnitedHealth Stock Drags on the Dow After DOJ Probe NewsUnitedHealth Group stock is sinking Friday on reports the Justice Department is investigating the health insurer. Here's what to know.
-
UnitedHealth Stock Drags on the Dow After DOJ Probe News
UnitedHealth Group stock is sinking Friday on reports the Justice Department is investigating the health insurer. Here's what to know.
-
Five Wins for Federal Employees in the Social Security Fairness ActMore money means more opportunities and financial stability for current retirees and future retirees.
-
How Do You Know Your Insurer Can Afford to Pay Your Claims?Here's how to find out where your insurance company stands financially and whether it has a good track record with customers.
-
Stock Market Today: Growth Concerns Drag on StocksForward-looking commentary from a major retailer outweighed its backward-looking results as all three major equity indexes retreated on Thursday.
-
Why Alibaba Stock Is Soaring After EarningsAlibaba stock is higher Thursday after the China-based e-commerce platform beat expectations for its fourth quarter. Here's what you need to know.
-
Palantir Stock: Why One Analyst Says to Buy the DipPalantir stock is continuing to slide Thursday as investors weigh a CEO stock sale and potential defense budget cuts. Here’s what you need to know.
-
Walmart Is the Worst Dow Jones Stock After Earnings. Here's WhyWalmart stock is sinking Thursday as the retail giant's dreary outlook offsets a fourth-quarter earnings beat and dividend hike. Here's what you need to know.
-
Stressed About Doing Your Taxes? Use These Easy Tips to CopeIf the thought of filing your taxes puts you on edge, you're not alone — nearly 65% of Americans say they're stressed during tax season. Here's how to cope.
