2024-05-17 17:22:51 ET
Summary
- Block combines financial services with content and cryptocurrency, highlighted by Cash App's growth and TIDAL's strategic acquisition, creating a unique, future-oriented ecosystem.
- The company's financials show high-growth potential with a strong balance sheet, despite EPS volatility and modest margins, driven by strategic investments and a focus on long-term innovation.
- My discounted earnings model values Block at $69 per share, reflecting a 5.9% overvaluation. Despite this, I think it is a compelling long-term investment because of high forecasted growth rates.
- Critical risks include exposure to potentially more aggressive AI and ML in finance, which could cause inhibitions in growth if the field's regulatory environment becomes more severe.
A Brand Of Personality And A Future-Oriented Ecosystem
Block ( SQ ) has many attractive features as a company, which, in my opinion, includes Jay-Z on the board of directors after Block acquired the majority of TIDAL from him. His impact on the company is stark from a marketing front, and when viewing Block's website, you can see the influence of pop music culture. Investors may already know Block well, but for those who don't, let me give you a brief breakdown of the company's core operational scope: ...
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Block Is A Moderately Undervalued Future Finance Ecosystem