This week, Block Inc.'s stock was experiencing victories.
This week, it's unlikely that Block (SQ, dropping by 2.26%) will be eager to bid farewell. The tech company had been seeing a significant rise in its stock value over the past trading days, thanks to a series of optimistic analyses from financial experts tracking its performance in the fintech sector.
These analyst evaluations led to an almost 12% increase in Block's share price by Thursday evening, as per data gathered by S&P Global Market Intelligence.
Post-Earnings Assessments
Surprisingly, this cluster of optimistic analyses for Block was released shortly after they released their underwhelming third-quarter results the previous week. Revenue increased by 6% annually, and non-GAAP (adjusted) net income skyrocketed by 76%.
While this looks impressive, revenue failed to meet the analysts' expectations, and adjusted profitability only matched them. Consequently, investors sold off the stock.
However, this didn't deter the analysts from maintaining optimistic perspectives on Block. On Monday, Piper Sandler analyst Arvind Ramnani started offering coverage for the company's shares with a confident overweight (buy) recommendation, at a target price of $83 per share. Ramnani stated that Block has demonstrated aptitude for venturing into new markets, and its services like Square Payments and Cash App have immense growth potential.
Ramnani wasn't the only one endorsing Block. Another analyst, Bernstein SocGen's Harshita Rawat, reaffirmed her outperform (buy) rating and $90 per share price target on the stock. Taking it a step further, Canaccord Genuity analyst Joseph Vafi boosted his price target by $25 to $120 per share and maintained his buy recommendation.
Bitcoin's Influence
Another factor contributing to Block's rising stock value is an upswing in Bitcoin's value. The company provides Bitcoin services to its clients and is a substantial investor in the cryptocurrency. The recent presidential election saw a ticket being elected that has expressed support for the cryptocurrency industry. Add in other positive factors such as a robust economy, and this has significantly increased Bitcoin's worth -- which, by extension, makes Block an appealing investment option.
Given the positive outlook from financial analysts like Piper Sandler's Arvind Ramnani and Bernstein SocGen's Harshita Rawat, who both maintain buy recommendations for Block with high price targets, the company might consider reinvesting some of its money into further financing its growth initiatives in the fintech sector. Additionally, as Bitcoin's value continues to rise due to favorable market conditions and a supportive presidential administration, Block, being a major player in Bitcoin services, could see increased revenue and profitability, making it an attractive option for investors interested in the finance and investing scene.
