Yahoo Finance Block (SQ) Soars on Upbeat Earnings & Outlook: ETFs to Gain
On November 2, 2023, the renowned fintech giant Block Inc. SQ saw investors flocking to its stock following a stellar earnings report that exceeded Wall Street expectations. The report was released after the market closed.
The company's shares experienced a surge of 16.8 in pre-market trading on Nov 3, underpinned by strong performance indicators across key sectors of its business. Shares also rose 7.4% in the key trading session on Nov 2 on two-times higher volume.
Beating the Estimates
The third-quarter financials showed an impressive beat on both earnings per share and revenue. Zacks Consensus Estimate was 44 cents per share, which Block surpassed with a reported 55 cents, adjusted. Revenues came in at $5.62 billion against the Zacks Consensus Estimate of $5.41 billion.
Block's third-quarter performance echoed robustness and expansion, with net revenue escalating 24% year over year. Bitcoin revenue played a significant part, climbing from $1.76 billion to $2.42 billion. The overall gross profit also saw a healthy increase, painting a picture of a company on the rise.
Raising the Bar
In a move that bolstered investor confidence further, Block revised its full-year forecasts upward. The company heightened its adjusted EBITDA expectations from $1.5 billion to a range of $1.66 to $1.68 billion. Moreover, the forecast for adjusted full-year operating income was given a substantial bump from $25 million to a range of $205 to $225 million.
Gross profit projections were stretched up to $7.46 billion. Block's forward-looking statements highlighted the anticipation of a significant boost in Adjusted Operating Income margin in 2024, assuming steady economic conditions.
Cash App and Square: Pillars of Growth
Central to Block's successful quarter was the remarkable growth seen in its Cash App and Square segments. Cash App's revenue skyrocketed by 34%, amounting to $3.58 billion, and Square was not far behind with a 12% growth spiking its revenue to $1.98 billion.
Leadership and Future Focus
Jack Dorsey, the co-founder of Block, reaffirmed his commitment to the company's growth and innovation in his communication to the shareholders. Despite previous challenges, including scrutiny from a short seller report, Dorsey's message was one of gratitude and accountability, emphasizing a strategy targeting local businesses and an inventive use of AI technology, as quoted on CNBC.
ETFs in Focus
The stock has a Zacks Rank #2 (Buy). Based on short-term price targets offered by 30 analysts, the average price target for Block comes to $77.77. The forecasts range from a low of $46.00 to a high of $110.00. The average price target represents an increase of 89.87% from the last closing price of $40.96.
Block has exposure to the below-mentioned ETFs. These ETFs should gain on Block’s robust outlook.
ARK Fintech Innovation ETF ARKF – Block has 6.98% exposure
Grayscale Future of Finance ETF GFOF – Block has 6.54% exposure
VanEck Digital Transformation ETF DAPP – Block has 6.15% exposure
ARK Next Generation Internet ETF ARKW – Block has 5.28% exposure
ARK Innovation ETF ARKK – Block has 5.07% exposure
(Disclaimer: This article has been written with the assistance of Generative AI. However, the author has reviewed, revised, supplemented, and rewritten parts of this content to ensure its originality and the precision of the incorporated information.)
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Block, Inc. (SQ) : Free Stock Analysis Report
ARK Next Generation Internet ETF (ARKW): ETF Research Reports
ARK Innovation ETF (ARKK): ETF Research Reports
ARK Fintech Innovation ETF (ARKF): ETF Research Reports
VanEck Digital Transformation ETF (DAPP): ETF Research Reports
Grayscale Future of Finance ETF (GFOF): ETF Research Reports
