![]() ![]() The increase was due primarily to additions to human resources, customer support, and compliance personnel."Īs revenue grows, Block has had to staff up significantly and I fully expect this to continue over time. General and administrative expenses were $362 million on a non-GAAP basis, up 44% year over year. In particular, the section below caught my attention: Block's expenses were higher almost in all categories: general operating expenses were up 13% YoY and Product Development expenses were up 37%.At $59.25, the stock is handily below key moving averages and I expect the stock to be under selling pressure over the next few days, especially if analyst downgrades pour in. Technically, the stock tried to bounce past its 20-Day moving average after the earnings but was knocked down.Just look at five of these names and you will understand the level of competition from established companies: But the proliferation of competitors, big and small, in the business of sending and receiving money is making life hard for the companies and relatively easy for the consumers. Needless to say, the company is betting and spending big on this payment service. "Cash App" was mentioned 72 times in the Q1 shareholder letter. No one should be surprised to see a bigger loss in Q2 or later, especially when factoring in deferred expenses. This is trending in the right direction (overall) as shown below but not yet in a consistent trendline. The fact remains that Block is still losing money, with Q1 reporting a net loss of $6 M. Despite the numbers generally beating expectations, we need to keep in mind that YoY comparisons are only part of the story.Block's earnings estimates have remained fairly constant over the last 3 months, which combined with the company's earnings history shown below augurs well for the believers.īlock Earnings History (Google Finance) Bad It is rare to find stocks of companies led by proven leader showing reasonable growth trading at attractive valuation. If you are a believer, you will like the fact that at a forward multiple of 35, Block is trading at a Price-Earnings/Growth ("PEG") of Block recently launched about 100 new products and features aimed at increasing the revenue of its customers (sellers). Square's gross profit grew 16% YoY, despite Paycheck Protection Program ("PPP") loan forgiveness. ![]() While Cash App has been getting most of the recent attention, Square, the company's original product and name, is still doing its fair share.Block had predicted a total of $9 trillion in addressable volume and while that remains lucrative yet lofty, the growth rate (both inflow and profit) so far is encouraging as shown below. Cash App: If you read the company's end of 2019 update to shareholders, you can see how excited the company already was about the Cash App ecosystem 4 years ago.This article analyses the Good, Bad, and Ugly from this earnings report and what that may mean for the stock's future. That's the classic "Beat, Raise, and Rise" but with the current macro environment, there is no assurance that the gains hold and the stock promptly closed nearly 2% lower in regular trading on Friday. The company beat on EPS and Revenue and also raised guidance for 2023 and naturally, the stock rose higher after-hours. ( NYSE: SQ) reported its Q1 2023's results after-hours on Thursday, May 4th, 2023 as Seeking Alpha has reported here. ![]()
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