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Block (SQ) Enhances Product Offerings With New Launches

Block’s SQ Square introduced a range of solutions for sellers, aimed at providing them with a competitive advantage during the holiday selling period.

Notably, Square’s launch of Themes, a suite of pre-built high-quality templates for Square Online, allows sellers to create unique, on-brand websites with features like 'Shop All' pages, product detail pages, mega menus, scrolling marquees, native videos and customizable buttons.

Further, Square introduced generative AI to retailers, enabling automatic description generation for new products, improving operational efficiency and allowing sellers to focus on other tasks, especially for sellers with large catalogs.

Additionally, Square for Retail integrated new features into operational workflows, enhancing inventory management by archiving old items, organizing holiday assortments, updating seasonal products, and enhancing barcode label printing.

Moreover, Square for Retail's checkout interface enhances service speed, integrates multiple fulfillment options and automatically calculates taxes.

We mark this move as Block’s increasing efforts to gain solid traction among various merchants including retail businesses, restaurants and beauty services sellers. This, in turn, will expand Block’s seller base.

Block, Inc. Price and Consensus

Block, Inc. Price and Consensus
Block, Inc. Price and Consensus

Block, Inc. price-consensus-chart | Block, Inc. Quote

More Into the Headlines

In addition to the abovementioned features, Block introduced an array of features to maximize customer engagement.

Notably, it introduced House Accounts for deferred payment, allowing businesses and clients to charge purchases, create invoices, and receive payments online via credit card, ACH, or Card on File.

Further, Square's Text Message Marketing allows sellers to incorporate images and GIFs to enhance brand reach and customer engagement with customers who rely on mobile devices for shopping or receiving messages.

Additionally, Square has introduced Retail Bundles that allow sellers to combine multiple items into a single basket, ensuring accurate inventory counts across locations and channels. This is likely to simplify gift shopping for customers.

Also, sellers can now offer Group eGift Cards, enabling customers to contribute to group presents and increasing value loads, with buyers receiving a shared link.

Thus, the above features are likely to aid Block in gaining strong momentum among buyers. Additionally, these features are expected to aid the performance of Square in the holiday season.

Strengthening Square Ecosystem

The company's recent move has added strength to its key offerings, highlighting its continued focus on innovation in its product portfolio, which has significantly influenced its growth trajectory.

Moreover, the abovementioned endeavors will strengthen its Square ecosystem and likely contribute to the overall financial performance of Block in the days ahead.

Our model estimate for 2023 Square ecosystem revenues is projected at $7.34 billion, indicating year-over-year growth of 9.6%.

The model estimate for 2023 total revenues is pegged at $21 billion, indicating growth of 19.8% from 2022.

However, product development expenses, increasing competitive scenarios and foreign exchange headwinds continue to remain concerns.

Notably, Block has lost 29.8% in the year-to-date period, underperforming the industry’s rally of 13.1%.

Zacks Rank and Stocks to Consider

Currently, Block carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader business services sector are AppLovin APP, APi Group APG and Braze BRZE. While AppLovin sports a Zacks Rank #1 (Strong Buy), APi Group and Braze carry a Zacks Rank #2 (Buy) each. You can see the complete list of today’s Zacks #1 Rank stocks here.

AppLovin shares have gained 275.7% in the year-to-date period. APP’s long-term earnings growth rate is currently projected at 20%.

APi Group shares have gained 39% in the year-to-date period. APG’s long-term earnings growth rate is currently projected at 17.73%.

Braze shares have gained 70.1% in the year-to-date period. BRZE’s long-term earnings growth rate is currently projected at 30%.

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