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The Newest Stock in the S&P 500 Has Soared 510% Since Its 2015 IPO, and It's a Buy Right Now, According to Wall Street
The Motley Fool· 2025-07-26 08:02
Core Viewpoint - Block has demonstrated significant growth and resilience in the fintech sector, recently being added to the S&P 500, indicating its strong market position and potential for future expansion [2][14]. Company Performance - Since its IPO in late 2015, Block has achieved a remarkable 510% stock price increase, significantly outperforming the S&P 500's 206% rise [2]. - The company's revenue has surged by 1,640%, while net income has increased by 867% [2]. - In the first quarter, excluding Bitcoin, Block reported revenue of $3.47 billion, an 8% year-over-year growth, and gross profit of $2.29 billion, climbing 9% [9]. - Operating income rose by 32% to $329 million, leading to adjusted earnings per share (EPS) of $0.56, a 19% increase [9]. - Gross payment volume (GPV) grew by 7.2%, with Cash App contributing to a 9% increase in gross profit per monthly active user [10]. Market Position and Analyst Sentiment - Block's inclusion in the S&P 500 reflects its strong position in the evolving fintech industry and the increasing mainstream adoption of Bitcoin [14]. - Despite lowering its guidance earlier in the year, 75% of analysts covering Block rate it as a buy or strong buy [11]. - Analyst Bryan Bergin maintains a buy rating with a price target of $115, suggesting a potential upside of 44% from the current stock price [12]. - The stock is currently valued at 19 times trailing-12-month earnings and 2 times sales, indicating it is relatively inexpensive given its growth potential [13]. Strategic Initiatives - Block has expanded its offerings beyond mobile payment processing to include a comprehensive suite of services such as business loans, digital retail, and consumer loans [6]. - The company has integrated its two main segments, Square Business and Cash App, to enhance user engagement and drive growth [6]. - Block has invested approximately $261 million in Bitcoin, holding 8,584 Bitcoin valued at around $1.03 billion, and plans to accept Bitcoin as a payment method [7].