Key Insights
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Block’s earnings exceed analyst expectations
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The company’s growth stays strong, despite worries triggered by the disappointing PayPal report at the beginning of February
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Block stock will have a good opportunity to gain additional upside momentum in case general risk appetite continues to grow
Block Stock Rallies After Strong Quarterly Report
Shares of Block gained strong upside momentum after the release of its fourth-quarter report.
Block reported revenue of $4.08 billion and adjusted earnings of $0.27 per share, beating analyst estimates on both earnings and revenue.
The company’s gross profit totaled $657 million in Q4 2021, while the Cash App Gross Profit was $518 million, up by 37% on a year-over-year basis. In the full year 2021, Block generated gross profit of $4.42 billion and adjusted EBITDA of $1.01 billion.
The company’s shares touched highs near the $290 level in August 2021 and have been moving lower for many months. In recent days, the stock moved below the $100 level amid a global rush out of riskier assets. However, the strong report helped Block stock to move back above the $100 level. Currently, it is trying to settle above $120.
What’s Next For Block Stock?
Analysts expect that Block will report earnings of $1.71 per share in 2022, so the stock is trading at 69 forward P/E. This is not cheap, and the key question is whether the market is ready to pay hefty premiums for growth.
Today’s trading action indicates that the market feared the worst and that the report has greatly exceeded traders’ expectations. Most likely, the near-term direction of Block stock will depend on general risk appetite.
In case risk appetite continues to grow despite the war in Ukraine and worries about inflation, Block stock will have a good chance to attract more investors as the company showed strong growth in its fourth-quarter report.
For a look at all of today’s economic events, check out our economic calendar.
This article was originally posted on FX Empire
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