To The Moon

$Block, Inc.(XYZ)$ is scheduled to report its fourth-quarter earnings for the period ending December 2024. Market is expecting Block to report a year-over-year increase in earnings on higher revenues.

I have position in Block with another broker, and I have hold it since August 2024.

Block is expected to post quarterly earnings of $0.88 per share which will be almost represents a year-over-year change of +90%. Revenues are expected to be $6.23 billion, up 8% compared to same period a year ago.

Block (XYZ) Last Positive Earnings Call Give 11.84% Change Since

Block has a positive earnings call when they release the previous result on 07 Nov 2024, this has given investors a 11.84% returns since.

The earnings call presented a strong financial performance with significant growth in gross profit, profitability, and cash flow. The company has a positive outlook for 2025, focusing on product innovations and strategic investments.

However, there are some concerns regarding delayed benefits and regulatory challenges, and moderated user growth for Cash App.

Block (XYZ) Watch 2025 Guidance For At Least 15% Gross Profit Growth

During the Q3 2024 earnings call, Block, Inc. provided several key metrics and guidance for the upcoming periods. Gross profit reached $2.25 billion, reflecting a 19% year-over-year increase, with Square and Cash App contributing growth of 16% and 21%, respectively. The company reported an adjusted free cash flow of $1.5 billion for the 12 months ending in September, compared to $945 million in the prior period. For Q4 2024, Block anticipates a gross profit of $2.31 billion, marking a 14% year-over-year growth. Additionally, the company expects modest improvement in Square's GPV growth and continuing momentum in Cash App's gross profit. The full-year 2024 guidance implies a Rule of 36, a notable improvement from the previous year's Rule of 30.

Looking ahead to 2025, Block aims for at least 15% gross profit growth, aligning with its target to achieve a Rule of 40 by 2026. The company's strategic focus includes expanding sales and marketing efforts, enhancing product offerings, and leveraging partnerships to drive growth across its ecosystem.

XYZ earnings per share for the last quarter are 0.88 USD whereas the estimation was 0.88 USD which accounts for -0.29% surprise. Company revenue for the same period amounts to 5.98 B USD despite the estimated figure of 6.24 B USD.

Estimated earnings per share for the next quarter are 0.88 USD, and revenue is expected to reach 6.29 B USD.

I would think investors need to watch annual changes over time to get a bigger picture of XYZ earnings per share and revenue dynamics.

Block (XYZ) Price Target

Based on 23 Wall Street analysts offering 12 month price targets for Block in the last 3 months. The average price target is $106.48 with a high forecast of $120.00 and a low forecast of $65.00. The average price target represents a 26.49% change from the last price of $84.18.

So the challenges of how analyst sentiment might influence ratings changes, these recent upgrades/downgrades could reflect shifting confidence. Consensus price targets relative to current levels indicate expected upside/downside.

Factors That Could Come From Broader Market Context

We need to understand that there are some macro trend like interest rates, consumer spending, and tech sector sentiment in early 2025 will influence post-earnings moves.

As seen in the last earnings, Block faced some challenges as follows:

Delayed Benefits: A delay in a onetime transaction cost benefit from a partner and expansion of Cash App Borrow into new customer segments, impacting Q4 results.

Regulatory Challenges: Uncertainty around the evolving regulatory environment for tech banks and potential impacts.

Moderated Cash App User Growth: Cash App MAUs remained relatively stable, with expectations to end the year at similar levels due to strategic onboarding adjustments.

Technical Analysis and Scenario Analysis - Exponential Moving Average (EMA)

As we looked at the technicals, we are seeing that XYZ is struggling with investor interest, we are not seeing much momentum from the RSI and XYZ is trading below the 12-EMA, which might reflect that there could be an upside on an earnings beat.

But the bulls would need to defend this area around the 12-EMA because we could see a risk of "sell the news" reaction.

Here are how I would trade based on how the earnings result come about.

Bull Case: Revenue beats (driven by Cash App growth, stable Bitcoin revenue), margin expansion, and raised guidance. Stock rallies 5–10%. This could bring XYZ past $90 dollars

Bear Case: Missed EPS/revenue, weak Cash App user growth, or declining Bitcoin revenue. Guidance cut due to macro headwinds. Stock drops 8–15%. XYZ could be going back to its lows around $75.

Neutral Case: In-line results with cautious commentary. Stock reacts modestly (±3%).

Summary

Block’s earnings will hinge on Cash App monetization, Square’s resilience, and Bitcoin trends. I think we should watch for profitability progress and management’s forward-looking statements.

I am holding my Block stocks maybe would add more if opportunities appear.

Appreciate if you could share your thoughts in the comment section whether you think Block could provide a better Cash App monetization and also gains from Bitcoin price rally at end of 2024.

@TigerStars @Daily_Discussion @Tiger_Earnings @TigerWire appreciate if you could feature this article so that fellow tiger would benefit from my investing and trading thoughts.

Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.