SQ - Is Now the Time to Buy Block Stock? 3 Things to Consider First
2024-05-11 05:52:00 ET
Stocks have surged higher over the past year-and-a-half, and the S&P 500 index is firmly in a bull market that began in October 2022. Despite the run-up in the broader market index, excellent investing opportunities exist today.
Block (NYSE: SQ) is one stock that is an intriguing opportunity for investors. The company is improving its efficiency and gross profit, and has made solid progress on these goals early this year. However, federal prosecutors are also investigating alleged compliance failures at Cash App and Square. If you're thinking of buying Block stock, consider the following first.
Last year, CEO Jack Dorsey announced Block's goal to reach the "rule of 40" target by 2026. The goal is for Block to produce sustainable profits and profit margins, with 40 equaling the sum of its gross profit growth rate plus the adjusted operating margin. Dorsey told investors that Block would cap its number of employees at 12,000 "until we feel the growth of the business has meaningfully outpaced the growth of the company."
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Is Now the Time to Buy Block Stock? 3 Things to Consider First