Goldman Sachs analyst Will Nance reiterated a Buy rating on Block, Inc.
The analyst said that he hosted a call with Block investor relations, and the company remains committed to achieving Rule of 40 performance by 2026, with mid-teens gross profit growth, margin expansion, and GPV acceleration expected in 2025.
SQ's stock has surged post-election, benefiting from SMB exposure, pro-cyclical trends, deregulation, and crypto market involvement, alongside a previously attractive valuation, adds the analyst.
Nance is optimistic about its trajectory, with investments in go-to-market strategies and products likely to boost Seller results, while Cash App continues to lead as a diversified U.S. consumer fintech asset with strong growth potential.
The analyst's bull-bear analysis of 2026 GAAP EPS shows SQ is positioned for strong fundamentals, supporting potential multiple expansion.
In the Bear case, Nance estimates GAAP operating expense growth of around 6%, leading to Non-GAAP margins of approximately 26% after amortization adjustments.
This results in projected GAAP and Non-GAAP EPS of ~$3.46 and ~$3.74, respectively, adds the analyst.
In the Bull case, the analyst assume GAAP operating expense growth of about 8%, reflecting increased spending on go-to-market initiatives.
After amortization adjustments, Non-GAAP margins are expected to reach 28%, with projected GAAP and Non-GAAP EPS of ~$4.17 and ~$4.46, respectively, adds the analyst.
Investors can gain exposure to the stock via VanEck Digital Transformation ETF
Price Action: SQ shares are up 0.37% at $87.62 at the last check Thursday.
