Summary
The fund managers believe that Block, Inc. represents a compelling investment opportunity despite recent volatility in its share price. In their opinion, the company's strong liquidity position, with approximately $7 billion available and no debt maturities until 2025, supports its aggressive growth strategy. They highlight Block's significant **market potential**, especially in the digital payments space, with over **50 million active Cash App users** and **4 million active sellers**. Furthermore, the anticipated **22% annual earnings growth** over the next three years, coupled with a **reasonable valuation of 19x FY25e earnings**, positions Block favorably for long-term investors. Although concerns about regulatory scrutiny and consumer sentiment have created short-term challenges, the managers remain confident in Block's ability to achieve its **Rule of 40** target by 2026, indicating strong revenue growth and profitability. Overall, they view the current share price as an attractive entry point, given the company's **innovative financial solutions** and commitment to enhancing user engagement.
Please note: The completeness, accuracy or current status of the investments referenced are not guaranteed.
Source: Trading View
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Commentary From The Managers
ELM Responsible Investments
24 July 2025
$120.09
Summary
- ELM Responsible Investments continues to hold Block due to its strong founder-led leadership.
- Block exhibits significant high-growth potential and improving financial discipline.
- The current valuation of Block appears increasingly attractive.
- Despite a cooling investor sentiment, there is a disconnect between market views and the company's progress.
- Over the past year, Block has focused on operational efficiency and achieved record profitability.
- Block has seen significant margin expansion even as revenue growth has moderated.
- The company's core ecosystems, CashApp and Square, continue to expand and deepen user engagement.
- There is notable momentum in international markets and with higher-value merchant clients.
- As artificial intelligence enhances productivity, Block is well positioned to benefit from leaner operating models.
- ELM Responsible Investments anticipates a re-rating as the market recognizes Block's accelerating margin expansion and growth trajectory.
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Please note: The completeness, accuracy or current status of the investments referenced are not guaranteed.
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Commentary From The Managers
ELM Responsible Investments
24 July 2025
$120.09
Summary
- ELM Responsible Investments continues to hold Block due to its strong founder-led leadership.
- Block exhibits significant high-growth potential and improving financial discipline.
- The current valuation of Block appears increasingly attractive.
- Despite a cooling investor sentiment, there is a disconnect between market views and the company's progress.
- Over the past year, Block has focused on operational efficiency and achieved record profitability.
- Block has seen significant margin expansion even as revenue growth has moderated.
- The company's core ecosystems, CashApp and Square, continue to expand and deepen user engagement.
- There is notable momentum in international markets and with higher-value merchant clients.
- As artificial intelligence enhances productivity, Block is well positioned to benefit from leaner operating models.
- ELM Responsible Investments anticipates a re-rating as the market recognizes Block's accelerating margin expansion and growth trajectory.
Yarra Capital Management
30 June 2025
$102.65
Summary
- Yarra Capital Management continues to hold an overweight position in Block Inc (XYZ).
- The US financial technology company has shown a rebound after a disappointing annual result earlier this year.
- Recent strength in Block Inc is due to the market's improved outlook for the US consumer.
- XYZ’s current financial year guidance has contributed to this positive sentiment.
- Yarra Capital Management remains optimistic about the company’s growth potential.
- The investment thesis is supported by expectations of improved growth from new merchant wins.
- Improved monetisation is anticipated as more users deposit their wages directly into CashApp.
- Currently, only 2.5 million users out of 57 million are utilizing this feature.
Swell Asset Management
30 June 2025
$102.65
Summary
- Swell Asset Management continues to hold due to the launch of Square AI, announced in May and launched in early June, which features a conversational AI assistant integrated into Square Dashboard.
- The goal of Block is to provide each seller with a virtual employee that deeply understands their business, facilitating easy inquiries and insights for business growth.
- Square has entered a three-year agreement with Live Nation Canada to offer comprehensive point of sale and payment processing at venues and festivals across Canada.
- The technology ecosystem includes the fully integrated Square Register, along with the Square Terminal and Handheld devices for seamless checkout experiences.
- Some venues will also feature in-seat ordering through Square Online.
- Since its launch, Cash App’s payment warnings feature has protected customers from over $2 billion in potential payment scams using AI and machine learning to evaluate risk.
- The system can temporarily block payments and alert users if suspicious transaction patterns or behaviors are detected.
Swell Asset Management
30 Apr 2025
$92.30
Summary
- Swell Asset Management reports first quarter adjusted operating income of $329 million with a 14% margin, an increase from $250 million and 12% last year.
- Adjusted diluted EPS stands at $0.56.
- Square GPV has grown 7.2%, with the US up 5.6% and international up 15%.
- Cash App gross profit per monthly transacting active increased to $81, up from $74 last year.
- Guidance for full year 2025 adjusted operating income revised to $1.9 billion or 19% gross margin, down from $2.1 billion and 21%.
- Jack Dorsey acknowledged disappointing results for Cash App and is focusing on three key areas for improvement: network density, product controls, and marketing spend.
- Investments in Square software and infrastructure are reportedly driving gains in market share and sales volumes.
- Dorsey expressed confidence in accelerating Block’s gross profit growth in the second half of 2025 and beyond.
- A suite of new tools has been introduced to Square Banking accounts, benefiting hundreds of thousands of sellers.
- Merchants signing up for Square Payments can link to a Square Checking account with no fees and instant payment processing.
- Square Savings accounts now offer personalized recommendations based on cash flow data and AI models.
- Sellers spent $3.6 billion through debit cards connected to Square Checking in 2024, a 29% increase from 2023.
- Over $300 million was held in merchants' Square Savings accounts at the end of 2024.
Endeavor Asset Management
31 Mar 2025
$86.47
Summary
- Block (formerly Square, XYZ) detracted from performance during the month.
- There was no deterioration in company-specific fundamentals.
- The company secured FDIC approval to roll out its Cash App Borrow product nationwide.
- This product targets short-term liquidity needs and offers sub-$100 loans.
- Block's loans have low default rates and pricing that is better than traditional payday lenders.
- Block will assume full control over the origination and servicing of these loans, totaling close to $9 billion in 2024.
- This expansion complements Block’s mission to improve financial access and enhances user engagement with the Cash App.
- Existing offerings like Square Loans and Square Savings are further supplemented by this new product.
- Trading on 11x FY26e P/E, with expected growth over 25%.
- Endeavor Asset Management continues to hold because Block offers compelling long-term value for shareholders.
Yarra Capital Management
31 Mar 2025
$86.47
Summary
- Yarra Capital Management continues to hold an overweight position in Block Inc. (XYZ).
- The company underperformed following the release of its fourth-quarter results, which were slightly softer than expected.
- Block reiterated its full year 2025 guidance but indicated a softer 1Q25.
- Growth is projected to accelerate through the calendar year.
- Market concerns about the outlook for the US consumer contributed to its stock's underperformance.
- Yarra Capital Management believes Block is a highly cash generative growth business.
- Block trades on an undemanding multiple of 12.4-times CY25 earnings and a PEG ratio of < 0.5 times.
Oracle Advisory Group
31 Mar 2025
$86.47
Summary
- Oracle Advisory Group notes that Block's stock experienced a sell-off due to lower-than-expected net revenues and earnings in the December quarter.
- Reported net revenues were US$6.03bn and earnings were 71 cents per share, below the consensus of $6.29bn and 88 cents per share.
- The first quarter outlook is also disappointing, with gross profit of $2.32bn versus the expected $2.39bn.
- As a high beta stock, Block faced significant selling in the current macro-driven sell-off.
- Despite these challenges, Oracle Advisory Group believes Block is one of the best companies in their portfolio for forward returns.
- High growth potential is anticipated in a normalized environment, making the current valuations very attractive.
- Thus, Block remains a key position for Oracle Advisory Group.
Swell Asset Management
28 Feb 2025
$103.09
Summary
- Swell Asset Management highlights a 4% increase in fourth quarter revenue to $6.0 billion, totaling $24.1 billion for the year, which is a 10% increase from 2023.
- Gross profit rose 14% to $2.3 billion in the fourth quarter, with an 18% increase for the year reaching $8.9 billion.
- Square's gross profit grew 12% to $924 million on a GMV of $59.0 billion, primarily driven by software and integrated payments.
- Cash App gross profit reached $1.4 billion, a 16% increase, with 57 million monthly transacting active users.
- Paycheck deposit monthly actives grew 25% year over year to 2.5 million, while the BNPL platform grew 19% to $10.3 billion in GMV.
- Product development expenses rose 12% for the year, primarily due to investments in software and technology infrastructure.
- Block achieved a Rule of 40 score of 36.5 in 2024, with 18% gross profit growth and an 18% adjusted operating income margin.
- Swell Asset Management expects Block to exit 2025 at a Rule of 40 run rate and remains on track to achieve the targeted Rule of 40 by 2026.
- Afterpay co-founder Anthony Eisen was appointed to the Block board of directors, enhancing strategic leadership.
- Block commissioned a survey revealing that 93% of retailers have implemented automation and 70% use data analytics for purchasing decisions.
- Retailers offering BNPL saw a 73% increase in usage over the past year.
- 64% of consumers desire personalized alerts based on past purchases, and over 80% seek exclusive discounts through loyalty programs, which 82% of retailers confirm drive repeat business.
Endeavor Asset Management
28 Feb 2025
$103.09
Summary
- Block Inc. (XYZ) shares fell post 2024 earnings due to investor concerns despite reasonable results.
- Gross profit rose 18% and EBITDA increased 69% to $3.03 billion, showcasing strong efficiency.
- Investors expected better Square momentum and clearer credit risk visibility, leading to a sell-off.
- Block anticipates accelerated growth in 2H25, focusing on expanding Square into a full commerce platform.
- Key initiatives, such as Afterpay’s integration with Cash App Card, aim to boost spending.
- While confident in execution, there remains investor caution around credit risks and sustained growth.
- At 12x underlying P/E and 30% expected EPS growth, Block’s valuation is not considered expensive.
- Given its strategy and improving profitability, Endeavor Asset Management increased their position, finding an attractive risk-reward despite near-term concerns.
Yarra Capital Management
28 Feb 2025
$103.09
Summary
- Block Inc. underperformed after Q4 results, which were slightly below expectations.
- The company reiterated 2025 guidance, anticipating growth acceleration through the year despite a softer 1Q25.
- Yarra Capital Management continues to hold an overweight position, citing Block's status as a cash generative growth business.
- Block trades at an undemanding multiple of 14.6-times CY25 earnings.
- The company's PEG ratio stands at less than 0.5 times.
Endeavor Asset Management
28 Feb 2025
$103.09
Summary
- Block Inc. (XYZ) shares fell post 2024 earnings due to investor concerns despite reasonable results.
- Gross profit rose 18% and EBITDA increased 69% to $3.03 billion, showcasing strong efficiency.
- Investors expected better Square momentum and clearer credit risk visibility, leading to a sell-off.
- Block anticipates accelerated growth in 2H25, focusing on expanding Square into a full commerce platform.
- Key initiatives, such as Afterpay’s integration with Cash App Card, aim to boost spending.
- While confident in execution, there remains investor caution around credit risks and sustained growth.
- At 12x underlying P/E and 30% expected EPS growth, Block’s valuation is not considered expensive.
- Given its strategy and improving profitability, Endeavor Asset Management increased their position, finding an attractive risk-reward despite near-term concerns.
Blackwattle Investment Partners
28 Feb 2025
$103.09
Summary
- Blackwattle Investment Partners updates investment thesis on XYZ, the largest negative contributor to performance.
- XYZ fell 31% in February due to softer than expected earnings guidance for 1Q25 and negative sentiment toward the US consumer.
- XYZ is a leading US-based fintech specialized in SME payments (Square) and consumer fintech (Cash App and Afterpay) with 60 million active users.
- Has a primary US listing and a secondary listing on the ASX, acquiring Afterpay in 2021.
- Since 2023, XYZ aims to reaccelerate growth and enhance financial discipline.
- Financial strategies include a headcount freeze for 2024, a Rule of 40 target by 2026, and improved shareholder returns through share buybacks.
- XYZ is seen as an ‘improving quality’ business, expected to show strong execution through 2024.
- Incremental earnings upgrades are anticipated from solid top-line growth and effective cost control.
- February results were solid, with guidance for 2025 reiterated, although 1Q25 guidance was softer than expected.
- Market skepticism requires XYZ to reaccelerate growth in the second half of 2025.
- Stock experienced a 17% drop on result day, partly due to pre-trade positioning and market expectations.
- Growing concerns around the US consumer add to share price weakness following the results.
- Despite challenges, Blackwattle Investment Partners remains confident in XYZ achieving its guidance due to multiple growth levers and a strong track record.
- The recent share price reaction presents a highly attractive risk/reward opportunity.
ELM Responsible Investments
28 Feb 2025
$103.09
Summary
- ELM Responsible Investments highlights Block's role in making financial services more accessible to underserved populations through innovative platforms like Square and Cash App.
- This commitment positions Block as an impactful player in the financial technology sector.
- In Q4 2024, Block reported $2.31 billion in gross profit, reflecting 14% year-over-year growth, and adjusted EBITDA of $725 million, with a 31% margin.
- Despite slightly missing market expectations, leading to a temporary decline in stock value, the fundamentals remain strong.
- Block's focus on efficiency and profitability continues, with a target of achieving the Rule of 40, balancing revenue growth and profitability.
- The company reported a 36% combined metric for FY 2024, showcasing resilience amid short-term challenges.
- ELM Responsible Investments believes Block is on track to meet its full-year financial goals, indicating potential for long-term growth.
- With increasing adoption of digital payments and expanding financial inclusion efforts, there is significant upside for Block as it strengthens its leadership in fintech.
Ten Cap
28 Feb 2025
$103.09
Summary
- Ten Cap continues to have a positive outlook on Block CDI despite a soft start to the year.
- Key metrics such as US gross payment volume (GPV) and payroll deposits exceeded expectations.
- Concerns around the US consumer contributed to a multiple de-rate.
- Ten Cap remains confident in Block’s long-term potential.
- The company’s valuation is increasingly attractive.
- Anticipated exit rate of “rule of 40” in CY2025 supports their thesis.
Oracle Advisory Group
31 Dec 2024
$140.98
Summary
- Oracle Advisory Group observes that stock price movements of Block resemble a free-swinging pendulum, reflecting investor sentiment rather than strict accounting measures.
- Over the past 18 months, Block's stock dropped to A$60 during market panic but rebounded to A$150, indicating volatility.
- In 3Q 2024, revenue (excluding Bitcoin) increased by 11.1% to $3,547m.
- Gross profit rose by 19% year-over-year to $2.25bn.
- Cash App gross profit surged 21% year-over-year to $1.31bn, while Square gross profit increased 16% to $932m.
- Adjusted EBITDA grew by 69% with a margin of 36%.
- Block aims to include Afterpay on the Cash App card, allowing customers to pay in instalments post-purchase.
- This change could enhance usage of Afterpay, benefiting its 24 million active users in the US.
- With 8,300 Bitcoin on its balance sheet, Block is well positioned to benefit from rising Bitcoin prices as they surpass USD $100,000.
Yarra Capital Management
31 Dec 2024
$140.98
Summary
- Yarra Capital Management provides an update on their investment thesis regarding Block Inc (SQ2).
- Block Inc has outperformed following a better-than-expected 3Q24 result and forward guidance.
- There's a positive outlook for SQ2, anticipating increased growth across its payments and financial services ecosystem into 2025.
- Enhanced distribution capabilities are expected to bolster performance.
- A focus on driving value in CashApp should accelerate gross profit growth in the coming years.
Swell Asset Management
31 Dec 2024
$140.98
Summary
- Swell Asset Management continues to hold due to strong second quarter revenue of $6.16 billion and a 20% increase in gross profit to $2.23 billion.
- Cash App gross profit rose 23% to $1.3 billion, while Square gross profit increased 15% to $923 million.
- A major Square upgrade is expected by September, reducing the number of apps from four to one, transitioning to a sales-oriented platform.
- The initiative to position Cash App for households earning up to $150,000 is ongoing, with marketing tests to boost user sign-ups.
- Afterpay co-founder Nick Molnar is leading a centralized Square sales team to enhance sales culture.
- Square's infrastructure upgrade completed in October allows for more flexible options for merchants, enhancing functionality and efficiency.
- Third quarter revenue reached $5.9 billion, with gross profit rising 18.5% to $2.3 billion.
- Block raised guidance on adjusted operating income and EBITDA for the full year, maintaining gross profit guidance.
- Jack Dorsey emphasized the importance of lending products and the upcoming Afterpay launch on Cash App Card, providing alternatives to credit cards.
- Block partnered with Lyft, allowing Cash App users to pay for rides seamlessly.
- New integration with SalonCentric streamlines purchasing and logistics for merchants.
- Block's Bitkey wallet introduces an inheritance plan for transferring funds securely.
- Block adopted Anthropic’s Model Context Protocol, promoting open-source technology for AI applications.
- Block’s impact investments aim to improve financial security in under-resourced communities, recognized by the Community Bank of the Bay as sustainability partner of the year.
Wilson Asset Management
31 Dec 2024
$140.98
Summary
- Block, Inc. offers a range of financial services, including payment and point-of-sale solutions.
- During the month, Block benefitted from two significant tailwinds.
- Block holds over 8,000 Bitcoin on its balance sheet, generating revenue from Bitcoin transactions for Cash App customers.
- Bitcoin maintained its November Trump rally gains through December, positively impacting Block due to its correlation with Bitcoin's price movements.
- Broader confidence in the US economy and USD-denominated earnings enhanced investor sentiment.
- This optimism positioned Block as a notable beneficiary on the ASX, attracting investor interest in its growth potential.
- Wilson Asset Management continues to hold Block in the portfolio as management is focused on expanding market opportunities and improving profitability.
- In our view, Block's valuation remains attractive relative to its growth profile.
DS Capital
31 Dec 2024
$140.98
Summary
- DS Capital invested in Block Inc, a US company that acquired Afterpay in 2021.
- While the Fund exited its position in Afterpay some time ago, DS Capital continues to monitor the evolution and integration of Block Inc.
- Since the merger, Block’s share price has fallen significantly despite substantial business improvements, which DS Capital finds attractive.
- Block is experiencing strong growth and has successfully integrated Afterpay with its Cash App product.
- Currently, Block is trading at half the price of its peers, raising interest for DS Capital.
- With a healthier US economy, DS Capital expects Block to continue its strong growth, streamline costs, and meet conservative guidance.
- There is potential for Block to be included in the S&P500 Index.
Yarra Capital Management
30 Nov 2024
$136.02
Summary
- Yarra Capital Management notes that Block Inc (SQ2) has outperformed expectations following strong 3Q results.
- Forward guidance indicates increased growth across Block's payments and financial services ecosystem into 2025.
- Yarra Capital Management maintains a positive outlook for SQ2 based on improved distribution capabilities.
- A focus on driving value in CashApp is expected to accelerate gross profit growth in the coming years.
Milford Asset Management
30 Nov 2024
$136.02
Summary
- Block, Inc. experienced a strong rally of +23.8% following its recent performance.
- Milford Asset Management recognizes Block as an innovative company with a robust brand appeal for both sellers and consumers.
- The company has shown improved profitability and aims to meet the rule of 40 by 2026, targeting mid-teens revenue growth and approximately 25% profit margin.
- The rule of 40 is a financial benchmark assessing a company's combined revenue growth rate and profit margin to reach at least 40%.
- Despite its recent strong performance, Block is still seen as reasonable value by Milford Asset Management.
Wilson Asset Management
30 Nov 2024
$136.02
Summary
- Block Inc. provides a variety of financial services and products, notably through Square, which aids businesses in transaction processing and growth.
- In its September 2024 quarter results, Block Inc. reported a 19% year-on-year growth in gross profit, totaling USD2.25 billion.
- The company demonstrated improved profitability with adjusted EBITDA of USD807 million, marking a 69% year-on-year increase that exceeded market expectations.
- Wilson Asset Management continues to hold because they expect Block Inc. to outperform its initial gross profit guidance for 2024.
- There is a positive outlook for 2025, with potential for Block Inc. to enter the S&P 500 Index.
Endeavor Asset Management
30 Nov 2024
$136.02
Summary
- Endeavor Asset Management continues to hold a small position in Block CDI, which saw shares appreciate by 24% in November.
- Block operates two key business segments:
- Cash App: A mobile app for sending, receiving, and managing money.
- Square: Tools for small businesses, including point of sale and payment processing.
- 3Q results indicated revenue and 4Q guidance were below expectations due to cost benefits pushed to 2025.
- Seller Gross Payment Volume (GPV) growth for Q4 is expected to be more modest than market expectations.
- Projected "meaningfully higher" GPV growth in CY25 adds optimism to the investment thesis.
- Block is well-positioned to leverage financial deregulation trends, providing additional growth opportunities.
- Over the past decade, Block has demonstrated remarkable growth:
- Processing Volume exceeds $200 billion in annualized card volume.
- Supports around 4 million active sellers.
- Cash App has more than 50 million active users, establishing it as a leading consumer fintech platform in the U.S.
- Endeavor Asset Management views Block as a compelling investment opportunity due to its vast untapped market, distinctive growth potential, and unique culture.
- Currently trades at an undemanding 19x FY25e earnings with anticipated earnings growth of 22% annually over the next three years.
QVG Capital
30 Nov 2024
$136.02
Summary
- Block's third quarter results indicate continued cost discipline.
- Outlook for CashApp and Square businesses shows potential for accelerating growth.
- Investment in sales and marketing is expected to drive further growth.
- Results were in-line with expectations, suggesting stability.
- Strong share price reaction attributed to cheap starting valuation.
- Expectations for increased activity and less regulation in the USA post-election.
Swell Asset Management
30 Nov 2024
$136.02
Summary
- Swell Asset Management continues to hold its position in Block CDI due to the innovative features of its bitcoin self-custody wallet, Bitkey.
- Bitkey has introduced an inheritance plan that allows wallet owners to transfer funds to a designated beneficiary after their passing.
- The wallet is designed to extend access to self-custody and empower users to manage their bitcoin simply and securely.
- Unlike other cryptocurrency accounts, Bitkey offers a simple onboarding process and does not require complex passwords.
- Block is an early adopter of Anthropic’s new Model Context Protocol (MCP), enhancing secure connections between data sources and AI tools.
- Block CTO Dhanji Prasanna emphasizes that open source is foundational to their work, aiming to drive meaningful change and serve as a public good.
- Open technologies like MCP ensure that innovation is accessible, transparent, and rooted in collaboration.
Yarra Capital Management
31 Oct 2024
$111.68
Summary
- Block Inc (SQ2, overweight) has shown strong performance during the period without company-specific news.
- Yarra Capital Management maintains a positive outlook for SQ2.
- The belief is that improved distribution capabilities will drive profitability.
- Focus on enhancing value in CashApp is a key factor for growth.
- There is an increasing likelihood of a soft economic landing which supports growth prospects.
- Block is trading at an undemanding multiple of 14.9-times FY26 earnings and 18.8-times FY25.
- The PEG ratio is <0.5-times, indicating strong growth potential for a low credit risk business.
Equity Trustees Asset Management
30 June 2024
$97.06
Summary
- Equity Trustees Asset Management initiated a position in Block Inc (SQ2) due to its strong technology-driven payment facilitation.
- The fund manager recognizes Block’s suite of software products designed for small businesses through the "Square" application.
- Block’s offerings enable seamless payment processing and integration into business operations.
- Equity Trustees Asset Management acknowledges Block’s consumer application, "Cash," which provides user-friendly banking software.
- The fund manager believes in the growth potential of Block’s innovative solutions compared to traditional banking products.
Oracle Advisory Group
30 June 2024
$97.06
Summary
- Oracle Advisory Group identifies Block (SQ2) as a top contender among ASX 100 stocks likely to yield substantial returns over the next 5 years.
- Recent market sell-off attributed to regulatory concerns surrounding a small segment of Block's operations.
- BNPL (Buy Now Pay Later) profits represent only 7% of Block’s total gross profit.
- Despite the sell-off, Oracle Advisory Group has chosen to increase their investment weight in Block.
- The situation reflects a belief in the overall strength and potential of Block beyond the current market reactions.
Endeavor Asset Management
31 May 2024
$98.66
Summary
- Block, Inc (SQ2) was a bottom performer, with a share price decline of 14.1% in May.
- Endeavor Asset Management notes concerns over growth prospects and increased competition in the digital payments space.
- There is heightened regulatory scrutiny over the Cash App business contributing to investor uncertainty.
- Despite challenges, Block has no debt maturities until March 2025 and ~$7 billion of available liquidity.
- Projected ~$2.5 billion of free cash flow (FCF) in 2024 supports growth strategies.
- Endeavor Asset Management believes SQ2 will continue to pursue growth ambitions aggressively.
- Focus areas include enhancing brand/product marketing with large merchants and exploring new app verticals.
ELM Responsible Investments
28 Feb 2024
$120.22
Summary
- ELM Responsible Investments notes that fintech company Block reported a 25% revenue growth to $21.9 billion for fiscal year 2023.
- Gross profit also increased by 25% to $7.5 billion.
- Adjusted EBITDA saw a significant rise of 81% to $1.79 billion.
- Block's Cash App division achieved a 33% increase in gross profit, totaling $4.3 billion.
- Square's gross profit rose by 16% to $3.1 billion.
- Block is committed to achieving the Rule of 40 by 2026, a key financial metric in the tech industry.
- Currently, Block has achieved a Rule of 29 and aims to improve this in 2024.
- For full-year 2024, Block anticipates gross profit to reach at least $8.65 billion, reflecting a 15% year-over-year growth.
- Cash App is expected to outpace Square in growth rate, with an operating margin projected in the mid-teens.
- Block aims to exceed guidance by at least 1% through enhanced performance in gross profit growth or adjusted operating income margin.
Oracle Advisory Group
31 Dec 2023
$113.78
Summary
- Block (SQ) was the top-performing stock in the Global portfolio during the quarter under review.
- Volatile stock price movements are characteristic of Block, experiencing rapid changes.
- Continuous recovery in earnings and cash flow performances has been noted.
- Management presented FY24E guidance during Block’s 3Q23 results.
- The investment framework prioritizes long-term value creation for both customers and shareholders.
- Block aims for Gross Profit Retention of over 100% and adherence to the Rule of 40 on Adjusted Operating Income.
- Target to reach Rule of 40 by 2026 with mid-teens gross profit growth and mid-20% adjusted EBIT margin.
- Market reacted positively to Jerome Powell's comments regarding interest rate stability, boosting Block's stock price by 22% in December 2023.
- Block's stock price remains flat over one year and down about 50% over two years.
- Oracle Advisory Group continues to hold its position in Block, expressing confidence in the company's future growth prospects.
Please note: The completeness, accuracy or current status of the investments referenced are not guaranteed.
Frequently Asked Questions
Who has invested in Block CDI (ASX:XYZ)?
Fund managers including Endeavor Asset Management, Ten Cap, Blackwattle Investment Partners, Milford Asset Management, Oracle Advisory Group, DS Capital, Equity Trustees Asset Management, Yarra Capital Management, Swell Asset Management, ELM Responsible Investments, QVG Capital and Wilson Asset Management have invested in Block CDI (ASX:XYZ).
Why have investment managers invested in Block CDI (ASX:XYZ)?
Fund managers are investing in Block CDI due to its strong growth potential, innovative financial technology offerings, and commitment to improving profitability. Despite recent fluctuations in stock price, Block has demonstrated significant revenue growth, particularly in its Cash App and Square segments, which cater to both consumers and small businesses. The company's focus on expanding its services, such as integrating Afterpay and enhancing user engagement through AI, positions it well for future growth. Additionally, Block's attractive valuation metrics, including a low price-to-earnings ratio and expected robust earnings growth, make it a compelling investment opportunity. Fund managers believe that Block's strategic initiatives and market leadership in digital payments will lead to long-term value creation for shareholders.
What happened to Block CDI (ASX:XYZ)?
In recent months, fund managers have expressed optimistic views on Block CDI, particularly as its share price rose from approximately $102.65 in June 2025 to around $120.09 by July 2025. Swell Asset Management highlighted the launch of Square AI, aiming to enhance business operations for sellers with a new conversational assistant, while also noting a significant partnership with Live Nation Canada for payment processing. Yarra Capital Management pointed to a rebound in Block's performance, attributing it to improved market sentiment and consumer outlook, with expectations of growth driven by new merchant acquisitions and increased CashApp monetization. ELM Responsible Investments emphasized Block's strong leadership and financial discipline, predicting a re-rating as the market recognizes its margin expansion and growth potential, particularly in international markets.