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Is SQ Stock a Buy on Block’s Earnings Boom? 3 Analysts Weigh In.

Investors are abuzz today after payment-processing company Block (NYSE:SQ) posted a strong earnings beat. Indeed, SQ stock is up big this morning on the first promising market open in a while.
Source: Sergei Elagin / Shutterstock.com
What do …

Investors are abuzz today after payment-processing company Block (NYSE:SQ) posted a strong earnings beat. Indeed, SQ stock is up big this morning on the first promising market open in a while.

Source: Sergei Elagin / Shutterstock.com

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What do you need to know about one of today’s big winners?

Well, Block, formerly known as Square, stunned investors today after crushing analyst estimates. Block handily beat earnings, net revenue and gross payment volume estimates in its earnings call yesterday.

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Strong gains from elevated Cash App users, up 4 million from June to December, beat many analyst expectations. Additionally, Block reported earnings before interest, taxes depreciation and amortization (EBITDA) of $184 million, compared to estimates around $143 million.

Block stock is up more than 21% this morning on the strong Q4 performance. Today’s drop comes as a rare bright spot for the company after a tumultuous past few months on the stock market. SQ has seen a roughly 54% decrease since October, when it reached $254 per share. Today it’s trending at $114, following the price jump.

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With that said, let’s see what the experts think about the buy-now-pay-later (BNPL) giant.

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3 Analysts Weigh In on SQ Stock

In the summer, Muzuho analyst Dan Dolev stated he believes buying SQ now could be the equivalent of buying J.P. Morgan (NYSE:JPM) in 1871. An unabashedly bold claim, Dolev argues Block’s future revenue potential remains high and the company continues to rapidly expanding into new spaces.

Speaking of the banking titan, J.P. Morgan analyst Tien-tsin Huang similarly gave Block an “overweight” rating. Citing the company’s recent acquisition of BNPL giant Afterpay, Huang expects Block to see enhanced profit growth.

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The 16-analyst panel at TipRanks gave SQ a “strong buy” rating. 14 analysts rated the company a “buy,” while only two maintained it’s a “hold.” They set an average 12-month price target of $195.13, representing 67% upside.

On the date of publication, Shrey Dua did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

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