Now trading at a price of $61.24, Block has moved -5.2% so far today.
Block returned gains of 13.5% last year, with its stock price reaching a high of $87.52 and a low of $38.85. Over the same period, the stock underperformed the S&P 500 index by -7.0%. The company's 50-day average price was $64.22. Block, Inc., together with its subsidiaries, builds ecosystems focused on commerce and financial products and services in the United States and internationally. Based in Oakland, CA, the Large-Cap Technology company has 12,985 full time employees. Block has not offered a dividend during the last year.
Increasing Revenues but Narrowing Margins:
| 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | |
|---|---|---|---|---|---|---|
| Revenue (M) | $3,298 | $4,714 | $9,498 | $17,661 | $17,532 | $21,916 |
| Gross Margins | 40% | 40% | 28% | 25% | 34% | 34% |
| Net Margins | -1% | 8% | 2% | 1% | -3% | 0% |
| Net Income (M) | -$38 | $375 | $213 | $166 | -$541 | $10 |
| Net Interest Expense (M) | -$18 | -$22 | -$57 | -$33 | -$36 | $47 |
| Depreciation & Amort. (M) | $61 | $76 | $84 | $135 | $341 | $409 |
| Diluted Shares (M) | 406 | 466 | 482 | 502 | 579 | 614 |
| Earnings Per Share | -$0.09 | $0.81 | $0.44 | $0.33 | -$0.93 | $0.02 |
| EPS Growth | n/a | 1000.0% | -45.68% | -25.0% | -381.82% | 102.15% |
| Avg. Price | $62.26 | $68.49 | $120.89 | $234.88 | $104.67 | $61.24 |
| P/E Ratio | -691.78 | 77.83 | 251.85 | 652.44 | -112.55 | 3062.0 |
| Free Cash Flow (M) | $234 | $265 | $35 | $714 | $5 | -$50 |
| CAPEX (M) | $61 | $62 | $138 | $134 | $171 | $151 |
| EV / EBITDA | 1026.56 | 285.15 | 806.45 | 364.23 | -213.87 | 277.45 |
| Total Debt (M) | $900 | $1,431 | $3,282 | $5,428 | $4,570 | $4,120 |
| Net Debt / EBITDA | 13.0 | 3.76 | 1.9 | 3.33 | -0.09 | -6.76 |
| Current Ratio | 2.07 | 1.9 | 1.88 | 1.78 | 1.85 | 1.9 |
Block has rapidly growing revenues and increasing reinvestment in the business and positive EPS growth. Additionally, the company's financial statements display a decent current ratio of 1.9 and healthy leverage levels. However, the firm suffers from slimmer gross margins than its peers and positive cash flows.
a Lower P/B Ratio Than Its Sector Average but Priced Beyond Its Margin of Safety:
Block has a trailing twelve month P/E ratio of 59.5, compared to an average of 31.58 for the Technology sector. Based on its EPS guidance of $4.62, the company has a forward P/E ratio of 13.9. According to the 76.0% compound average growth rate of Block's historical and projected earnings per share, the company's PEG ratio is 0.78. Taking the weighted average of the company's EPS CAGR and the broader market's 5-year projected EPS growth rate, we obtain a normalized growth rate of 25.7%. On this basis, the company's PEG ratio is 2.32. This suggests that these shares are overvalued. In contrast, the market is likely undervaluing Block in terms of its equity because its P/B ratio is 1.96 while the sector average is 4.11. The company's shares are currently trading 1555.1% below their Graham number.
Block Has an Average Rating of Buy:
The 37 analysts following Block have set target prices ranging from $40.0 to $100.0 per share, for an average of $87.15 with a buy rating. The company is trading -29.7% away from its average target price, indicating that there is an analyst consensus of strong upside potential.
Block has a very low short interest because 1.7% of the company's shares are sold short. Institutions own 70.2% of the company's shares, and the insider ownership rate stands at 0.86%, suggesting a small amount of insider investors. The largest shareholder is Vanguard Group Inc, whose 8% stake in the company is worth $2,789,009,058.
