Heading into Square-parent Block's first-quarter earnings report, Wall Street expectations are running low, with some analysts expecting a guidance cut. Bulls hold out hope that Chief Executive Jack Dorsey can engineer a rebound for Square stock in the second half of 2025 amid growing worries over the U.S. economy.
The company reports earnings after the market close on Thursday. In its core businesses, Square operates a two-sided digital payments ecosystem, with products designed for both merchant sellers and consumer buyers.
Key Financial Metrics
San Francisco-based Block's earnings included consumer lending firm Afterpay. The Square Cash App helps individuals manage money, buy stocks and cryptocurrency, and more.
Some analysts expect continued weakness in Square's merchant business in Q1 but an eventual rebound.
"Given the headwinds in the quarter, Q1 should represent a trough in gross payment volume growth which should improve through the year from customer acquisition initiatives including increased marketing, new U.S. sales teams, international expansion and partnerships ramping," said Deutsche Bank analyst Bryan Keane in a report.
He added: "Despite some macro uncertainties, we are not expecting any change in Block's 2025 guidance – (Street) pricing in a cut in guidance, in our view."
If a U.S. recession hits, the relatively low income level of some of Square's customer base is concern.
On the stock market today, Square stock fell more than 3% to 57.31 in morning trading. Meanwhile, Block stock is down about 30% in 2025.
Square Stock: Earnings Estimates
"The rising macro (economic) uncertainty has contributed to the stock's underperformance," said Jefferies analyst Trevor Williams in a report.
"While we still expect an acceleration post-Q1 helped by sales/marketing investments, macro uncertainty likely drives a cut to the fiscal year outlook."
Square earnings on an adjusted basis for the period ended March 31 are expected to be 97 cents, up 15%, with net revenue rising 4% to $6.186 billion.
Financial analysts also view gross profit as a key metric for Square stock. In Q1, analysts predict gross profit of $2.538 billion, up 11%. Also, analysts model earnings before interest, taxes, depreciation and amortization, a key metric known as EBITDA, of $791 million.
In Q1, analysts predict gross payment volume from the transactions of merchant customers of $57.996 billion.
Morgan Stanley James Faucette recently upgraded Block stock to overweight based on valuation.
Block Stock: Technical Ratings
"Our proprietary survey work across 200 U.S. small and medium-sized businesses suggest that Square's product/service combination is more favorably viewed than we had expected, with high adoption and satisfaction across merchant sizes along with healthy utilization of banking services, improving our view that Square will show modest volume acceleration over the course of 2025."
Block stock holds an IBD Composite Rating of 61 out of a best-possible 99, according to IBD Stock Check-up. IBD's Composite Rating combines five separate proprietary ratings into one easy-to-use rating. The best growth stocks have a Composite Rating of 90 or better.
Square stock, meanwhile, holds an Accumulation/Distribution Rating of D-minus. The rating runs from a best-possible A+ to a worst-possible E. The rating analyzes price and volume changes in a stock over the past 13 weeks of trading.
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