Assessing Block (SQ) Valuation After Recent Share Price Reset And Cash App Growth Narrative

Why Block stock is drawing attention now

Block (SQ) shares have moved unevenly in recent months, with a gain over the past month alongside a double digit decline over the past 3 months and year. That split performance is prompting closer scrutiny from investors.

See our latest analysis for Block.

At a share price of US$65.15, Block’s recent 30 day share price return of 6.61% contrasts with a 90 day share price decline of 17.55% and a 1 year total shareholder return decline of 29.14%. This suggests that momentum has softened even as expectations around growth and risk continue to reset.

If Block’s mixed performance has you reassessing your watchlist, this could be a good moment to widen the search with other high growth tech and AI names such as high growth tech and AI stocks.

With Block trading at US$65.15 and data pointing to an implied discount to some valuation estimates, the key question is whether the recent reset leaves underappreciated upside or whether the market already reflects its future growth potential.

Most Popular Narrative: 22.4% Undervalued

With Block’s fair value in the narrative set above the recent US$65.15 close, the gap between price and modelled worth is what catches the eye.

The rapid acceleration in new product launches, especially around peer-to-peer features (like Cash App Pools) and integration of AI into product development, is heightening Cash App's network effects and virality, likely driving improved user acquisition and engagement, which supports recurring revenue expansion in future quarters.

Read the complete narrative.

Want to see what kind of revenue trajectory and profit margins that product engine is built around, and how they feed into Block’s long term earnings power and valuation multiple assumptions? The key inputs behind that fair value might surprise you.

Result: Fair Value of $84.01 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, this hinges on Cash App sustaining high engagement and on crypto related revenues staying resilient, both of which could be pressured by competition or regulation.

Find out about the key risks to this Block narrative.

Build Your Own Block Narrative

If you see the story differently or prefer to test the assumptions yourself, you can build your own view in just a few minutes with Do it your way.

A great starting point for your Block research is our analysis highlighting 3 key rewards and 1 important warning sign that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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