Buoyed by a holistic growth model, Block (NYSE: SQ) has gained 47.9% over the past year, outperforming the Zacks Business-Services sector’s rally of 26.9% and the S&P 500’s return of 31.1%.
However, the company has underperformed its industry’s rise of 62.9% in the same time frame.
Block’s strong positioning in the digital payments industry on the back of its robust payment and point-of-sale (POS) solutions, which include both hardware and software to accept payments, streamline operations, and analyze business information, is a major positive.
SQ’s comprehensive commerce ecosystem, which enables sellers to combine software, hardware and payment services to accept payments from customers, helps it sustain solid momentum across sellers. Strength Square ecosystem is a plus.
One-Year Price Performance
Image Source: Zacks Investment Research
Despite this positive scenario, market uncertainties, high inflation, unfavorable foreign exchange fluctuations and sluggish trends in consumer spending are concerning for the company. The normalization trend in the post-pandemic era is negative.
The combination of both risks and rewards is prompting investors to question how they should play the SQ stock.
Block Rides on Portfolio Strength
Block has been gaining solid momentum among several sellers across various industries, such as food, retail and services, and geographies, including the United States, Japan, Australia and Canada. The primary factor behind this remains its robust product portfolio, which, in turn, is increasing its Gross Payment Volume (GPV). In the second quarter of 2024, the company processed $61.94 billion of GPV, up 5% year over year.
SQ’s omnichannel offerings, which help sellers create differentiated customer experiences on the back of customer insights by managing orders from POS and eliminating manual aggregation of online and in-person …
Full story available on Benzinga.com