Strong Momentum in Block (XYZ)’s Square and Cash App Segments Drives UBS’ Bullish Stance

Core Viewpoint - Block, Inc. (NYSE:XYZ) is experiencing strong momentum in its Square and Cash App segments, leading to a bullish outlook from UBS analyst Timothy Chiodo, who has set a price target of $90 and reiterated a "Buy" rating [2]. Group 1: Financial Performance and Projections - Despite seasonal trends indicating a potential deceleration in Gross Payment Volume (GPV), Block, Inc. has maintained its Q4 2025 outlook, which suggests robust growth in gross profit and adjusted operating income [3]. - The company projects mid-teens annual gross profit growth through 2028, aiming to reach $15.8 billion, alongside approximately 30% annual growth in adjusted operating income and adjusted EPS [5]. - By 2028, non-GAAP cash flow is expected to reach 25% of gross profit, translating to over $4.0 billion on a non-GAAP cash flow basis [5]. Group 2: Growth Drivers - The Cash App ecosystem is identified as a key growth driver, with management projecting a mid-teen gross profit CAGR over the next three years, supported by rising active users and enhanced monetization strategies [4]. - The Square ecosystem is also expected to scale further domestically and internationally, driven by investments in telesales and field sales [3]. Group 3: Strategic Initiatives - Block, Inc. has increased its share repurchase program by $5 billion, reflecting management's confidence in the company's financial trajectory [6]. - The company is leveraging Artificial Intelligence (AI) to enhance its technology offerings across various platforms, including Square, Cash App, Afterpay, Bitkey, and Proto, thereby supporting global commerce and financial services [6].