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Block (XYZ), formerly known as Square, has been one of the most disruptive fintech players of recent years. The company’s two major payments ecosystems, Square and Cash App, serve small and medium-sized businesses (SMBs), consumers, and even cryptocurrency buyers.
However, Block stock has struggled, falling dramatically since its peak, dragged down by rising interest rates, concerns about consistent profitability, increased competition, and broader macroeconomic uncertainty.
Valued at $41 billion, Block stock is down 20% year-to-date, compared to the broader market index gain of 5.2%.
Amid the macroeconomic uncertainties, let’s find out if Block stock can rebound this year.
Block Reported a Mixed Quarter But Showed Resilience
Block operates two main ecosystems:
- Square, which targets businesses, and
- Cash App, which targets consumers
The company also has newer, evolving ecosystems, such as TIDAL, a music streaming service that Block acquired, to help artists integrate into its financial services ecosystem. Afterpay, a buy now, pay later (BNPL) service that the company acquired in 2022, is now integrated into Cash App. Bitkey is a self-custody wallet designed for Bitcoin (BTCUSD), while Proto provides Bitcoin mining products and services.
Block has shown signs of operational resilience in the first quarter of 2025. Revenue for the quarter stood at $5.7 billion, falling short of the consensus estimate of $6.17 billion and down from $5.9 billion the year before. Management stated during the Q1 earnings call that consumer behavioral shifts during tax refund season resulted in a decrease in discretionary spending (particularly in travel and media), while non-discretionary categories such as groceries and gas remained stable. Despite the temporary headwinds, Block remains optimistic about the second half of 2025, supported by the national rollout of Cash App Borrow, which received FDIC approval in March.
The Square app, however, showed a 7% annual increase in revenue and 9% gross profit growth, aided by a 7.2% increase in GPV, indicating effective go-to-market (GTM) execution and improved banking attach rates. Square’s Q1 momentum was driven by strong share gains in key verticals, success with midmarket sellers, and the continued rollout of 100-plus product innovations.
Adjusted EBITDA increased 15% YoY to $813 million. Adjusted earnings per share also rose 19.1% to $0.56, falling short of analyst expectations of $0.93. Trailing 12-month free cash flow totaled $1.53 billion. Block repurchased $600 million in stock through April and reaffirmed its commitment to continued capital returns.
CEO Jack Dorsey announced that Proto is on track to be delivered in the second half of 2025, with an addressable market of $3 billion to $6 billion. Block has already begun to tighten its cost base, recognizing the need for leaner operations. Management reiterated that future acceleration will be primarily driven by the Cash App BNPL ramp, the Proto hardware rollout, and Square’s product velocity and GTM execution.
Block forecasts a conservative 9.5% increase in second-quarter total gross profit. The company expects gross profit of $9.96 billion for the full fiscal year, a 12% increase over last year.
Analysts covering Block stock predict an 18.7% drop in earnings, which could rebound by 38.6% in 2026. Block, trading at 17 times forward 2026 earnings, appears to be a reasonable buy right now for investors willing to bear the short-term risk.
What Is Wall Street’s View on XYZ Stock?
On Wall Street, Block stock is a “Moderate Buy.” Out of the 42 analysts covering XYZ, 26 have a “Strong Buy” recommendation, four say it's a “Moderate Buy,” eight rate it a "Hold,” and four suggest a “Strong Sell.” Currently, Block stock is hovering around its average price target of $67.11. However, its Street-high price target of $100 suggests upside of 50% in the next 12 months.
A High-Risk, High-Reward Opportunity
Block’s 2025 playbook outlines efforts to accelerate growth in the second half while remaining resilient in the short term amidst macroeconomic caution. Square’s go-to-market engine is gaining traction, Cash App is generating consistent revenue, and Proto introduces a completely new vertical.
However, investors must accept the risks associated with a company that is still finding its financial footing amidst aggressive expansion efforts. If Block can maintain consistent profitability while realizing the full monetization potential of its platforms, it could be a compelling high-risk, high-reward opportunity. However, for risk-averse investors, it remains a risky bet in the fintech space.
On the date of publication, Sushree Mohanty did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
