Investors in Block, which has seen its shares pounded this year after a critical short-seller report, may have something to celebrate on Thursday if the fintech delivers on year-over-year and quarter-over-quarter earnings growth expectations.
Analysts surveyed by FactSet expect Block (ticker: SQ ) — led by former Twitter CEO Jack Dorsey — to report earnings of 35 cents a share on revenue of $4.6 billion after the hour. It will represent a growth in earnings per share of 59% from the previous quarter and 94% growth from…
Investors in Block
,
which has seen its shares pounded this year after a critical report from a short seller, may have something to celebrate on Thursday if the fintech delivers on expectations for year-over-year and quarter-over-quarter earnings growth.
Analysts surveyed by FactSet expect Block (ticker: SQ ) — led by former Twitter CEO Jack Dorsey — to report earnings of 35 cents a share on revenue of $4.6 billion after the hour. That would represent earnings per share growth of 59% from the previous quarter and 94% growth from a year ago, with quarterly revenue down from $4.65 billion in December but up from $4 billion in March 2022.
Such a solid result should please investors in the company – which includes mobile payments platform Cash App, point-of-sale system Square and “buy now, play later” service Afterpay – which has seen its shares slide this year.
Shares in Block fell 5.6% on Thursday in 2023, compared with a gain of 6.5% for
S&P 500
index and a jump of 14.9% in the technology-heavy index
Nasdaq Composite.
Much of the decline in Block stock has come since March 23 — before which the stock was up 16% year-to-date — when Hindenburg Research disclosed a short position and published a critical report on the business. A short position is a trade that effectively bets against a stock, and Hindenburg alleged that Block had inflated user values and failed to rein in illegal activity by customers on the Cash App platform.
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Block pushed back against the claims, first by saying it would explore legal action against Hindenburg, and then by issuing a detailed rebuttal. In a statement, the company provided verified user figures and reiterated its rigorous approach to risk and compliance.
Investors should not expect the headwinds from Hindenburg’s claims, which divided Wall Street, prompting a series of downgrades from analysts, to let up just yet. While the core metrics from Block’s earnings will be key when the company releases results, expect questions — and potentially new revelations — as analysts are almost certain to benefit from the earnings conference call to grill management.
Write to Jack Denton at [email protected]
