Block, Inc. (XYZ) shares are trading higher on Thursday.
Yesterday, the company provided guidance at its Investor Day event.
• XYZ is gathering positive momentum. Check the market position here.
The company also announced a $5 billion increase to its stock repurchase program.
JPMorgan analyst Tien-tsin Huang reiterated the Overweight rating on the stock.
Huang says Block’s latest Investor Day offered a more confident and disciplined outlook for the company’s next phase.
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He notes Block remains focused on economic empowerment but is shifting toward greater autonomy across its ecosystems.
Analyst’s Take
The analyst highlights familiar growth drivers like lending, banking tools and stronger go-to-market execution, gaining traction.
He adds that leaders showed renewed energy toward profitability, automation and tighter connections between Cash App and Square.
Huang believes the new reporting framework should give investors clearer insight into Block’s sources of growth.
The analyst is watching how Block bridges its ecosystems through initiatives such as Neighborhoods and Lightning-based dollar payments.
Huang also sees upside in emerging AI features like Moneybot and Managerbot, though he stresses disciplined execution.
Huang also highlights significant organizational changes since the last Investor Day, including the appointment of new leaders and a streamlined structure.
Huang says these shifts unlocked faster product development across both Square and Cash App. He highlights Block’s large seller base and Cash App user footprint as strong foundations for future expansion. Huang expects lending, pricing and ongoing network enhancements to support high-teens Cash App growth through 2028.
He also sees promise in products like Afterpay Pre-Purchase and expanding commerce tools tied to Cash App Pay.
Per the analyst, these efforts should deliver low-to-mid-teens growth in Square volume and gross profit, reversing past stagnation.
Financially, Huang points out that Block’s long-term targets topped expectations across gross profit, profit growth and cash flow.
He highlights guidance showing strong adjusted operating profit expansion and sustained Rule-of-40 performance.
Huang notes Block will now guide to adjusted EPS, with management projecting healthy growth over the forecast period. He adds that Block’s new non-GAAP cash flow metric targets significant gains through 2028 as margins expand.
XYZ Price Action: Block shares are trading higher by 1.89% to $63.17 at publication on Thursday.
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