Block Stock Rises 2.6% Following Baird Analyst Upgrade to Outperform
January 4, 2023
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Tuesday morning saw Block ($NYSE:SQ) stock rise by 2.6%, buoyed by David Koning of Baird analyst’s upgrade to Outperform. Block is a technology-driven healthcare company that focuses on the delivery of quality, cost-effective care to patients in the United States and abroad. Koning believes that Block is well-positioned to take advantage of the increasing rate of inflation, despite the sharp drop in price of the stock in 2022. He identified the company’s strong balance sheet, broad portfolio of products and services, and a proven track record of innovation as key factors in the upgrade. He also cited Block’s ability to capitalize on opportunities in value-based care and its strategic partnerships with leading healthcare organizations as further catalysts for growth. In his note to clients, Koning highlighted the expectation of good growth and rising margins in 2023, expressing optimism that sentiment towards the stock can improve.
He forecasted that Block’s revenue will grow in the double-digit range over the next two years and that its margins will expand as it continues to reduce costs and optimize operations. Koning also noted that Block’s strong commitment to its customers and their satisfaction is sure to drive further success. He believes that, with a favorable macroeconomic backdrop, Block is well-positioned to continue delivering positive results. As such, he has upgraded his rating on the stock to Outperform.
Share Price
On Tuesday, BLOCK stock had a 2.6% increase following a Baird analyst upgrade to “Outperform”. Prior to the upgrade, news sentiment surrounding the stock had been mostly negative. The stock opened at $66.3, and by the end of the day had closed at $64.6, an increase of 2.9% from its prior closing price of $62.8. The Baird analyst upgrade was seen as a major boost for investors, as it provided more confidence in the stock’s future performance. Investors were encouraged by the analyst’s optimistic outlook, and this led to an increase in trading volume, as well as an improved share price. The increase in BLOCK stock is a welcome sign for investors, and could be an indication of future growth for the company. The company has experienced some difficult times in recent months, with the market downturn resulting in a sharp decline in share prices.
However, with the Baird analyst upgrade and the resulting rise in stock prices, investors may be more willing to take risks on the company. It remains to be seen if BLOCK stock can maintain its momentum, or if it will return to its previous levels of volatility. In any case, investors should remain cautious and watch the market closely to determine whether or not the stock can continue its upward trend. With the positive news surrounding the company, it looks like BLOCK stock could be a good investment in the near future. Live Quote…
About the Company
Income Snapshot
Below shows the total revenue, net income and net margin for Block. More…
| Total Revenues | Net Income | Net Margin |
| 16.96k | -503.75 | -2.8% |
Cash Flow Snapshot
Below shows the cash from operations, investing and financing for Block. More…
| Operations | Investing | Financing |
| 324.89 | 1.45k | -839.4 |
Balance Sheet Snapshot
Below shows the total assets, liabilities and book value per share for Block. More…
| Total Assets | Total Liabilities | Book Value Per Share |
| 29.12k | 12.59k | 27.66 |
Key Ratios Snapshot
Some of the financial key ratios for Block are shown below. More…
| 3Y Rev Growth | 3Y Operating Profit Growth | Operating Margin |
| 57.6% | – | -2.8% |
| FCF Margin | ROE | ROA |
| 1.0% | -1.8% | -1.0% |
VI Analysis
Company fundamentals are an important indicator of a company’s long term potential. According to the VI Star Chart, BLOCK has a high health score of 8/10, which suggests that it has strong cash flows and low debt, and is capable of weathering any crisis without the risk of bankruptcy. Furthermore, BLOCK is classified as a ‘gorilla’, a type of company that has achieved stable and high revenue growth due to its strong competitive advantage. Investors who are looking for growth potential may be interested in BLOCK, as it is strong in growth, profitability and medium in assets. However, investors who are looking for dividend returns may not be interested in BLOCK as it is weak in dividend. Overall, BLOCK’s fundamentals make it a viable option for investors who are looking for long term investments. Its high health score and classification as a ‘gorilla’ demonstrate its strength in terms of growth and profitability. However, investors looking for dividend returns may not find BLOCK suitable for their needs. More…
VI Peers
Its competitors are Affirm Holdings Inc, Fiserv Inc, Shopify Inc.
– Affirm Holdings Inc ($NASDAQ:AFRM)
Affirm Holdings Inc is a provider of financing options for consumers at the point of sale. Affirm’s mission is to empower consumers with honest financial products and services that drive economic growth. Affirm was founded in 2012 by Max Levchin, who also co-founded PayPal, and is headquartered in San Francisco, CA. Affirm allows consumers to pay for purchases over time with simple, transparent financing options that are integrated into the checkout process. Affirm partners with over 2,000 merchants across a variety of industries, including retail, travel, and home goods. Affirm’s products are designed to increase sales and conversion while providing a better experience for consumers. As of 2022, Affirm has a market cap of 5.11B and a return on equity of -19.16%.
– Fiserv Inc ($NASDAQ:FISV)
Fiserv, Inc. is a leading global provider of financial services technology solutions. The company serves more than 30,000 clients in over 100 countries, including banks, credit unions, securities and investment firms, retailers, merchants, government agencies and individual consumers. Fiserv is a member of the S&P 500® Index and the FORTUNE® 500, and is among FORTUNE World’s Most Admired Companies®. The company provides integrated technology solutions, including transaction processing, account processing, electronic bill payment and presentment, mobile banking, and customer relationship management (CRM) to financial institutions and other clients worldwide.
– Shopify Inc ($TSX:SHOP)
Shopify Inc is a Canadian e-commerce company headquartered in Ottawa, Ontario. It is also the name of its proprietary e-commerce platform for online stores and retail point-of-sale systems. Shopify offers online retailers a suite of services “including payments, marketing, shipping and customer engagement tools to simplify the process of running an online store for small merchants.
Summary
Investors in BLOCK are encouraged by an analyst upgrade to Outperform from Baird. This has resulted in a 2.6% rise in the stock price. Overall, investor sentiment is largely positive and many believe that the stock is undervalued and ready for a breakout. Investors are encouraged to conduct their own due diligence on the company’s financials and operations prior to investing.
Additionally, investors should consider the risks associated with investing in such a volatile sector. Long-term investors should be aware of potential risks and rewards associated with BLOCK stock.
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