Following a 70% de-rating of the shares over the past 12 months, the analyst expects Block to re-rate to a 60-times price-to-earnings ratio based on 2023 estimates given its 32% organic revenue growth potential.
Fotheringham also expects Block will "surprise positively" on growth and earnings.
Fotheringham's model is more bullish than consensus due to out-year forecasts for a "softer landing" for Cash App and Afterpay accretion revenue growth and earnings.
The analyst highlights the company's investor day on May 18 as a potential positive catalyst.
Price Action: SQ shares traded lower by 1.98% at $117.45 in the premarket on the last check Monday.
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