Block (SQ) Valuation Check After Recent Share Price Slide

Block has quietly slipped another 2% over the past week and almost 16% over the past month. That has left many investors wondering whether the recent slide reflects fundamentals or simply shifting sentiment around fintech and payments.

See our latest analysis for Block.

Zooming out, the stock’s weak recent share price returns sit on top of a tougher year overall. The 1 year total shareholder return is also firmly negative, suggesting momentum has clearly been fading despite steady revenue growth.

If Block’s slide has you reassessing your exposure to fintech, this could be a good moment to broaden your watchlist and explore high growth tech and AI stocks as potential alternatives.

With shares down sharply over one and five years, even as revenue inches higher and analysts see upside to the current price, investors now face a familiar dilemma: is Block undervalued here, or is future growth already priced in?

Most Popular Narrative: 27.3% Undervalued

With the narrative fair value near $84 and Block last closing at $61.11, the story implies a sizeable disconnect between price and projected earnings power.

The analysts have a consensus price target of $85.158 for Block based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $104.0, and the most bearish reporting a price target of just $35.0.

Read the complete narrative.

Curious what kind of revenue climb, margin reset, and future earnings multiple have to line up to support that gap between today’s price and fair value? Discover the full playbook behind those projections.

Result: Fair Value of $84.01 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, the bullish setup could falter if Cash App user growth slows, or if rising credit losses from Borrow and BNPL products start to squeeze margins.

Find out about the key risks to this Block narrative.

Another View: Market Pricing Is Less Generous

Analysts see Block as 27.3% undervalued, but our DCF model tells a cooler story, with fair value near $56.55 versus today’s $61.11. This implies the stock may already be slightly overvalued. Which lens do you trust when the growth narrative and cash flow math disagree?

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Block for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 919 undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own Block Narrative

If you want to stress test these assumptions yourself and dig into the numbers, you can build a personalized Block thesis in minutes, Do it your way.

A great starting point for your Block research is our analysis highlighting 3 key rewards and 1 important warning sign that could impact your investment decision.

Looking for more investment ideas?

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.