{"id":71224,"date":"2023-10-11T00:20:49","date_gmt":"2023-10-11T04:20:49","guid":{"rendered":"https:\/\/ifintechworld.com\/investing\/blocks-stock-has-seen-a-massive-pullback-but-bofa-predicts-more-than-50-upside-from-here\/"},"modified":"2023-10-11T00:20:53","modified_gmt":"2023-10-11T04:20:53","slug":"blocks-stock-has-seen-a-massive-pullback-but-bofa-predicts-more-than-50-upside-from-here","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=71224","title":{"rendered":"Block\u2019s stock has seen a \u2018massive pullback,\u2019 but BofA predicts more than 50% upside from here"},"content":{"rendered":"
\n

Block Inc. shares have seen a \u201cmassive pullback\u201d since the end of July, but BofA Global Research analyst Jason Kupferberg sees a buying opportunity in the payment-technology name. <\/p>\n

Kupferberg remains upbeat about Block\u2019s
\n SQ,
\n +5.24%<\/bg-quote>
\n earnings potential, noting that the company \u201chas made positive strides in reducing its cost structure\u201d yet has the opportunity to move even more quickly in pursuit of becoming a Rule of 40 company based on the sum of its gross-profit growth and adjusted operating margin.<\/p>\n

\n

See also:<\/strong> Block\u2019s stock has been a laggard lately. Will management shakeup provide a needed jolt?<\/p>\n

Block\u2019s operating-expense growth has been \u201celevated\u201d as a percentage of gross profit relative to PayPal Holdings Inc.
\n PYPL,
\n -0.41%<\/bg-quote>
\n and Intuit Inc.
\n INTU,
\n +0.97%<\/bg-quote>
\n when they were of similar size and growth, according to Kupferberg\u2019s analysis. Were Block to close the gap even halfway, he thinks the company could post 2024 adjusted earnings before interest, taxes, depreciation and amortization (Ebitda) 20% higher than what Wall Street is currently modeling.<\/p>\n

Investors could get some positive profit news even before that, however, as Kupferberg sees the possibility that Block raises its 2023 adjusted Ebitda outlook on its third-quarter earnings call in early November, owing to recent operating-expense discipline. <\/p>\n

Read:<\/strong> PayPal\u2019s stock has \u2018catalysts aplenty\u2019 \u2014 but this analyst still feels cautious<\/p>\n

Kupferberg also thinks that Block\u2019s gross-profit growth should earn it a higher valuation. \u201cConsensus is modeling a 16-17% [gross-profit compound annual growth rate through 2025], and even if this proves to be modestly too high, we believe this growth profile justifies a materially higher multiple,\u201d he wrote. <\/p>\n

He noted the stock\u2019s \u201cdepressed valuation\u201d and recommended that the board \u201cintensify its operational oversight, to ensure that [Block] maintains its tradition of product innovation, while executing on the evolving distribution model at Square.\u201d<\/p>\n

Kupferberg has a buy rating on Block\u2019s stock along with a $71 price objective \u2014 more than 50% above current levels. <\/p>\n

Block shares have lost 43% since closing at $80.53 on July 31, though they gained about 5% in Tuesday\u2019s action.<\/p>\n<\/p><\/div>\n<\/div>\n

Read the full article here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Block Inc. shares have seen a \u201cmassive pullback\u201d since the end of July, but BofA Global Research analyst Jason Kupferberg sees a buying opportunity in the payment-technology name. Kupferberg remains upbeat about Block\u2019s SQ, +5.24% earnings potential, noting that the company \u201chas made positive strides in reducing its cost structure\u201d yet has the opportunity to […]<\/p>\n","protected":false},"author":1,"featured_media":71225,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"video","meta":{"footnotes":""},"categories":[239],"tags":[83],"class_list":["post-71224","post","type-post","status-publish","format-video","has-post-thumbnail","hentry","category-investing","tag-featured","post_format-post-format-video"],"yoast_head":"\nBlock\u2019s stock has seen a \u2018massive pullback,\u2019 but BofA predicts more than 50% upside from here | iFintechWorld<\/title>\n<meta name=\"description\" content=\"Block Inc. shares have seen a \u201cmassive pullback\u201d since the end of July, but BofA Global Research analyst Jason Kupferberg sees a buying opportunity in the\" \/>\n<meta name=\"robots\" content=\"index, follow, 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