Block’s Bitcoin-Hamped Results Keep Stock Below 2018 Levels

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Block’s($NYSE:SQ) stock has been lagging behind other fintech companies in recent weeks, due in large part to the impact of bitcoin on its results. While the company reported solid overall results for the quarter, the market has been focused on the weak revenue numbers due to the collapse in bitcoin transaction revenues. This has caused the stock to trade below the levels where it traded back in 2018. Looking ahead, it is uncertain how long the market will remain focused on Block’s bitcoin-related issues. If the company can continue to post strong results despite the headwinds from bitcoin, then the stock may eventually rebound.

However, if bitcoin transaction revenues continue to decline, then Block’s earnings and market share could be adversely affected.

Market Reaction

On Wednesday, Block stock opened at $86.8 and closed at $88.8, a 9.5% increase from its previous closing price of $81.1. Despite this uptick, the stock is still below its 2018 levels, something that investors are keeping an eye on.

VI Analysis

Company’s fundamentals reflect its long term potential, below analysis on BLOCK are made simple by VI app. According to VI Star Chart BLOCK is strong in growth, medium in asset, profitability and weak in dividend. BLOCK is classified as a ‘cheetah’, a type of company that achieved high revenue or earnings growth but is considered less stable due to lower profitability. High growth companies are deemed more volatile as they attempt to grow faster. BLOCK has a high health score of 7/10 with regard to its cashflows and debt, is capable to sustain future operations in times of crisis.

Summary

Some investors may believe that the company is undervalued and may be a good long-term investment.