Block: Refined Strategy, Improved Profitability, Cheap Valuation

Summary:

  • Block has executed well in its renewed strategy and focus on operational efficiency, sustaining growth and improving profitability in Q2.
  • Square and Cash App remain high quality businesses with several growth verticals and large addressable markets.
  • SQ’s centralized sales approach and focus on product development should help rekindle growth.
  • Strengthening fundamentals, $3B in share repurchases and a historically cheap valuation are more support for SQ as a long-term attractive buy.

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Investment Thesis

Block (NYSE:SQ) has taken meaningful strides this year in its transition from high-flying growth stock to steady compounder, yet the stock continues to flounder. The company has pared back operating expenses and narrowed the focus of its


Analyst’s Disclosure: I/we have a beneficial long position in the shares of SQ either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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