By Emily Dattilo
Block stock has considerable room to rise, partly because it stands to benefit from Bitcoin mining, Oppenheimer argued on Thursday.
Analysts led by Rayna Kumar upgraded shares of the payments company to Outperform from Perform. They set a target of $115 for the price, implying a gain of about 32% from the current price.
Shares of Block, which operates through two segments -- Square and the Cash App -- gained 1.6% to $89.30 in morning trading. Square is a point-of-sale system that lets businesses accept card payments. The Cash App is a digital wallet service.
The team says the upgrade was driven by a few reasons including recent investments in products and sales that should prompt faster growth in gross payment volume. "In 2025E, we model Square GPV growth to accelerate to 12% from 9% in 2024E, and ahead of consensus' estimate of 10%," the analysts wrote.
Beyond that, the analysts also view the company's Bitcoin mining strategy as a way to bring in additional gross profit.
"In July, Block announced that Core Scientific, one of the largest publicly traded Bitcoin mining companies, would deploy Block's new application-specific integrated circuit ('ASIC') mining chips," analysts wrote. "We believe Block will continue to create and sell customized ASIC mining chips to make mining more accessible and promote decentralization."
Oppenheimer said it doesn't know specifics of possible future deals but says the company is trying to become the Nvidia of ASIC mining chips.
Overall, Block is on track to continue gaining market share, the team added, saying it is making more money from its products and still has a large potential market to tackle.
Write to Emily Dattilo at emily.dattilo@dowjones.com
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
December 19, 2024 11:19 ET (16:19 GMT)
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