By Emily Dattilo
Shares of Block were trading sharply higher Friday after the payments fintech delivered a quarterly report that left Wall Street cheering.
Block stock was up 7.5% to $75.50 in premarket trading, while futures tracking the S&P 500 rose 0.4%.
After markets closed Thursday, Block -- which is the parent company of payments company Square -- filed adjusted earnings of 85 cents and revenue of $5.96 billion, topping analysts' call for 72 cents and $5.83 billion, respectively. For the second quarter, Block is guiding for gross profit of $2.16 billion to $2.18 billion. For the full year 2024, it raised its guidance for gross profit to $8.78 billion from $8.65 billion.
BTIG analysts Andrew Harte and Thomas Smith say the quarter offered bears little to criticize.
"If anything, we could imagine some investors picking at Block Head Jack Dorsey's shareholder letter being 100% dedicated to bitcoin, but we think the upside potential he lays out in the letter from bitcoin activities paired with the fact that only 3% of company resources are dedicated to bitcoin-related projects will quickly quiet any skeptics," they wrote.
The team -- which sees Block delivering at least 15% gross profit growth while expanding margins over the next several years -- maintained its price target of $90 and Buy rating.
Seaport Research Partners analyst Jeff Cantwell was also optimistic, raising his target for the price to $101 from $95 and maintaining a Buy rating. The company "is showing strength operationally in this 'new' phase as it focuses on optimization, while also investing to drive growth over the longer-term," he wrote.
Needham analysts led by Mayank Tandon also weighed in on the report, lifting their price target to $105 from $95 and maintaining a Buy rating.
"We remain constructive on SQ, especially given the improving profitability and ongoing product innovation which we believe will help growth re-accelerate in the seller ecosystem," they wrote.
Write to Emily Dattilo at emily.dattilo@dowjones.com
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(END) Dow Jones Newswires
May 03, 2024 08:59 ET (12:59 GMT)
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