Block: Booming Momentum On Structural Growth Upside

Summary:

• Block’s Q2 2024 performance exceeded expectations, with gross profit growing 20% YoY to $2.23 billion and adjusted EBITDA up 81% YoY to $759 million.
• Strong growth in Cash App and Square segments, driven by Cash App Card, Cash App Borrow, Afterpay, and Square Loans, bolstered overall performance.
• Block raised FY24 guidance, projecting adjusted EPS of $3.74 and gross profit of $8.65 billion, with further growth expected from BNPL integration and expanded financial services.
• Revised EPS projections for 2024-2026 and a lower cost of equity lead to a new target price of $112, reflecting Block’s improving profitability and growth potential.

Block’s (NYSE:SQ) commercial momentum is beating expectations: During Q2, the company managed to score a 20% YoY growth in gross profit, and an 81% YoY jump in adjusted EBITDA. Moreover, following strong results, Block raised its FY24 guidance, projecting a 15% YoY increase in gross profit to $8.65 billion

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