IPO & Market Performance - The IPO was priced above the offered range at $40 [1] - Demand for the company is substantial due to its presence in the fintech ecosystem and the early stage of the buy now pay later market [1] - Some companies that IPOed this year, like Figma, E Toro, have pulled back significantly from their highs, with Figma down approximately 63% from its highs [6] - Profit-taking is expected after stock run-ups, and the underwriter is Goldman Sachs, alongside JP Morgan and Morgan Stanley [7][8][9] Company Strategy & Growth - The company is pivoting towards becoming a retail bank [2][3] - The company's tools enable consumers to manage cash flows and avoid high credit card debt [4] - The company is expanding its banking franchise in the United States, the UK, Sweden, and other parts of the world [4] - The company is in 26 countries and continues to expand into new markets [9] Financial Outlook - The company has had five consecutive quarters of profitability and expects more profitable quarters ahead [2] - Positive news is expected from the company's earnings reports in the third and fourth quarters of this year [9] - The company is considered a compelling investment compared to its competitors, and the investor may add to their position if the stock stays down [10]

What’s behind the boom in buy now pay later https://t.co/HwlD6Bib3j ...

Buy Now Pay Later (BNPL) Market Overview - US e-commerce is approximately a $1 trillion business, with BNPL pushing $70-80 billion, a small fraction of the overall opportunity [2] - BNPL is mostly skewed towards a younger demographic, particularly the 18-34 cohort, who may not trust traditional credit cards or banks [3][4] - The growth of the BNPL market primarily impacts banks, as BNPL transactions are often settled using debit cards [9][10] BNPL and Economic Conditions - The common perception is that BNPL will struggle in a weak economy, but it could be countercyclical, helping retailers increase conversions [5][6][7] - Merchants may steer consumers towards BNPL to facilitate sales during economic downturns [7][8] Company Specific Analysis - Affirm (AFRM) is considered a buy due to its unlimited total addressable market (TAM) and strong execution, offering various payment options beyond just "pay in four" [12][14] - PayPal's (PYPL) buy now pay later offering is integrated into its branded checkout button, expected to drive growth, and is performing well in Europe [16][17][18] - Circle (USDC) is rated as underperform due to flat distribution of USDC at $68 billion and increasing distribution costs, impacting revenue potential [21][22]

Buy Now Pay Later (BNPL) Market Analysis - US e-commerce is a \$1 trillion business, with BNPL currently pushing \$70-80 billion, representing a small fraction of the overall US retail market, which is about \$7-8 trillion [5] - BNPL is misunderstood to be steered towards people without access to banking, but it's skewed younger, particularly the 18-34 cohort, who may not trust credit cards or banks [5][6][7] - BNPL's counter-cyclical potential lies in helping e-commerce retailers convert sales that regular credit/debit cards might not, potentially thriving in a weaker economy [8][9][10] - BNPL growth primarily impacts banks, as they are the current credit card operators, while Visa and Mastercard benefit from increased transaction volume due to installment payments [11][12][13] Company Specific Analysis - Affirm is considered a buy due to its unlimited TAM (Total Addressable Market) and strong execution, differentiating itself from Klarna by offering a wider range of products, including interest-bearing loans [13][14][15][16] - PayPal is also a buy, with BNPL being a key part of its new branded checkout button, expecting BNPL to grow in the 40s over the next 2-3 years, accelerating branded checkout button growth, and gaining market share in Europe [17][18][19] - Circle is rated as underperform due to flat USDC distribution at \$68 billion since April, increasing distribution costs, and potential revenue shortfall [20][21][22][23] Housing Market Analysis - Home builder sentiment has fallen to its lowest level since 2022 due to persistently high mortgage rates constricting the market [3][41] - Mortgage rates need to be closer to 6% than 7% to loosen up the market, but consistency in rates is lacking, making borrowers cautious [43][44] - The Fed cutting rates would signal to banks to cut construction lending rates, boosting production, but the Fed's primary focus is on inflation and the labor market, not directly on housing [46][47][48] - Tariffs have been priced in, with about 60% of builders reporting increased goods costs, but the impact hasn't been as significant as initially anticipated due to slowed construction pace [52][53][54][55]

In June, the Fair Isaac Company, better known as FICO, announced it would be making a change to the calculation of its credit scores to now include buy now pay later loans. Here to explain what that means for your money is Yahoo Finance Banking lead editor and content strategist Casey Bond. So Casey, let's just set the table here.How is a credit score calculated. Yeah, so there are a handful of factors that go into that calculation. The most important being your payment history.So, paying your bills on time ...

Consumer Spending & Demand - The company is seeing good demand and strength in consumer spending, with growth in the high 30s percentage year-over-year [1][2] - Consumers' shopping patterns, borrowing, and ability to pay back loans remain strong [2] - The company is witnessing a shift from revolving credit to responsible payment options [7][9] BNPL & Credit Scoring - FICO's move to reflect buy now pay later (BNPL) data in credit scores is considered beneficial [3][4] - A significant percentage of people who haven't tried BNPL services feel it doesn't reflect their repayment history or help build their credit score [3] - The company has been reporting transactions to credit bureaus since 2017, demonstrating responsible repayment behavior by customers [4] - The company encourages the rest of the BNPL industry to participate in reporting to credit bureaus [5] Business & Industry Trends - Elective medical services are becoming a component of the company's volume, indicating a shift in BNPL usage [8] - The company expects continued strength and is optimistic about the second half of the year [10] - Consumers are apportioning their money and seeking fixed payment timelines for a sense of control and confidence [10]

Core Viewpoint - Block's stock has seen recent appreciation due to positive developments, but year-to-date performance remains negative amid competitive pressures and consumer spending softness [1][2]. Group 1: Stock Performance - Block shares have appreciated approximately 5% in the past month and 12.7% in the past week [1]. - Year-to-date, Block shares are down 26.5% due to increasing competitive pressure and softness in consumer spending, particularly in discretionary areas [2]. - Block shares have underperformed compared to competitors like PayPal and Affirm, which have seen declines of 16.3% and 15.8% respectively [3]. Group 2: Business Developments - Cash App Afterpay has expanded its merchant base, adding brands across various categories, which may enhance its market presence [7]. - Block's Cash App Afterpay combines services to allow eligible customers access to Buy Now Pay Later products when shopping online [8]. - Block is focusing on improving engagement with Cash App Card customers and has received FDIC approval to offer consumer loans nationwide through Cash App Borrow [9][10]. Group 3: Financial Outlook - Block expects gross profit of $9.96 billion for 2025, indicating a growth of 12%, with expectations of accelerating growth in the latter half of the year [11]. - The Zacks Consensus Estimate for 2025 earnings is $2.72 per share, down 30.4% over the past 30 days, indicating a 19.29% decline from 2024 [15]. - The consensus estimate for first-quarter 2025 earnings is 61 cents per share, down 36.5% over the past 30 days, reflecting a 34.41% year-over-year decline [16]. Group 4: Valuation and Market Position - Block shares are considered overvalued with a forward 12-month Price/Earnings (P/E) ratio of 19.92X compared to PayPal's 13.45X [17]. - Block shares are trading below the 200-day moving average, indicating a bearish trend [20].