BMO Capital analyst Rufus Hone downgrades $Block (SQ.US)$ to a hold rating, and adjusts the target price from $94 to $100.
According to TipRanks data, the analyst has a success rate of 78.9% and a total average return of 16.8% over the past year.
Furthermore, according to the comprehensive report, the opinions of $Block (SQ.US)$'s main analysts recently are as follows:
It has reportedly become more challenging to anticipate higher gross profit margins at Block. Following a 22% increase in share value since the third quarter, maintaining the current pace of financial outperformance in 2025 and 2026 might be tough. The expected growth in gross profits from Cash App may bear potential risks, and achieving the 'Rule-of-40' target by 2026 could set a steep challenge in terms of profitability per employee. There are concerns that sustaining Block's gross profit growth could prove increasingly demanding without an increase in staffing levels.
Despite some investors' concerns that Block's initial 2025 guidance of at least 15% profit growth might be overly ambitious, an analysis of the company's three ecosystems suggests a more promising outlook. Even with incremental growth in monthly active users and moderated growth in monetization rates, Cash App excluding buy-now-pay-later is projected to achieve mid-teens profit growth. Moreover, initiatives like merchant verticalization and simplified onboarding processes could catalyze a 12% growth in Square profits. Additionally, a high-20% profit growth is anticipated for the buy-now-pay-later sector by 2025. These conservative estimates collectively support a projection of at least 16% total gross profit growth for Block in 2025.
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