2023-08-02 15:26:07 ET
Digital payments firm Block ( NYSE: SQ ) is set to report earnings on Thursday, with investors closely watching the performance of its payments platform Cash App, its margins and profitability.
Wall Street analysts expect the company formerly known as Square to post earnings per share of $0.37, which would represent year-over-year jump of 105.6%, and revenue of $5.1 billion.
Block has seen significant changes to its estimates in the past three months. Earnings per shares forecasts have been revised downwards 13 times, compared with 8 upwards revisions, while revenue estimates haven been revised downwards 4 times vs. 17 upwards revisions.
In late June, the company's Square payment systems for businesses introduced a new credit card and loan options in beta .
In March, short seller Hindenburg released a report claiming Block "overstated" its user counts and "understated" customer acquisition costs, sending its shares tumbling. Its shares have bounced back since then, up over 15% YTD.
Seeking Alpha analyst Johnny Zhang said , "SQ is showing some promising signs with its concerted efforts toward margin recovery and profitability. The company is expected to see a rebound in margin and adjusted EPS in FY2023."
Zhang noted that the cryptocurrency recovery in the recent months could boost the company's Bitcoin Gross Profit line.
Fellow analyst Julian Lin said , "While fintech names have taken a pronounced beating amidst the valuation reset in the tech sector, I expect the cashless secular growth story to help the company sustain double-digit top-line growth over the next decade."
Seeking Alpha analysts at large rate the Jack Dorsey led company Buy. This compares to average Wall Street rating of Buy and SA Quant rating of Hold.
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Block earnings look-ahead: Watching Cash App and crypto