2024-02-07 08:30:00 ET
Summary
- Block stock has continued to attract strong buying sentiments, suggesting that I may have been too cautious over the company's ability to drive operating leverage.
- Block's best-in-class growth grade and improved profitability profile could be sufficient to justify its growth premium.
- Block's network effect moat is gaining clout, setting it apart from its peers. Its Bitcoin integration has also been validated with PayPal's increasing focus on embracing cryptocurrencies.
- I argue my Hold thesis on SQ is looking increasingly tenuous, as the setup heading into its fourth-quarter earnings release looks attractive.
My previous downgrade on Block, Inc. (SQ) was predicated on my belief that the company could find it more challenging to chart a more pronounced profitability inflection while being valued at a premium. Despite that, SQ has continued to attract robust buying sentiments, suggesting I could have been too cautious....
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Block: Surprisingly Resilient As I Was Too Cautious (Upgrade)