Block stock rises following profit growth tied to Cash App
Yahoo Finance examines Block shares as Wall Street analysts issue stock ratings on the digital payment company.
BRAD SMITH: We're also watching shares of Block closing in the green. They closed higher. The company, formerly known as Square, up by about 4.3%. This comes after the company posted strong growth in gross profit and a $484 million growth in profit for Cash App there. Now, analysts, they like this report here. We saw some analysts, some new ratings come out over the course, early this morning as well.
And what particularly continues to be noted, especially from Truist, they said, "We appreciate ambition-- buy." Very simple terms that they put out there. But they're believing in this investment framework. They're saying that that's positive. And they assert that the market will appreciate that commitment to an economically-based gross profit retention. And then this rule of 40 objective, you can go further into that on their report. But it implies significant improvement, at least from some of the targets that Truist had prior to this report as well.
SEANA SMITH: Yeah, Jefferies, they have a buy rating and a $85 price target here on Block. So about, what, 7 bucks higher than where we are today. And they said that the strong performance of the Cash App and Afterpay offset the miss that we certainly did see on gross payment volume. The miss on gross payment volume was obviously a miss, something that the Street did not want to see, but still up 15% year over year. So certainly still seeing a growth in that metric and that data print there.
But subscription and services-based revenue, that jumping 70% year over year. That Cash App business reported 848 million in gross profit. That's a 64% year over year rise. So clearly up big this year. And as you can see from the stock's reaction today, the Street seems to be pleased with those results.
BRAD SMITH: Yeah, I'll tweet out my Cash App after the show just to make sure it's still works, if anybody wants to check it with me.