Key Stats for Block Stock
- Current Price: $77.24
- Target Price (Mid): ~$151
- Street Target: ~$98
- Potential Total Return: ~96%
- Annualized IRR: ~17% / year
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What Happened?
Block (XYZ) closed at $77.24 on October 9. That is 8.97% below its closing peak in TIKR’s drawdown data and about 11% below the $86.92 52-week high in TIKR’s market data. The gap persists even though 2026 guidance sits well above the plan Block laid out at its November 2025 Investor Day. Block will report third-quarter results after the close on November 3, per its investor relations materials. That makes the next question is where the next leg of gross profit comes from. On September 9, at the Goldman Sachs Communacopia + Technology Conference, Chief Financial Officer and Chief Operating Officer Amrita Ahuja pointed to the users Cash App already has.
50 Million Cash App Users Still Don’t Bank There
At Investor Day, Block planned for 17% gross profit growth and about $2.7 billion in adjusted operating income in 2026. On September 9, Ahuja said guidance called for 21% growth and nearly $3.5 billion, with adjusted EPS up 70%. Block measures itself with a Rule of 40 test: gross profit growth plus adjusted operating income margin, after stock-based compensation. On that test, she said Block has delivered “Rule of 52” so far, with guidance pointing to “close to a Rule of 50 company for the year.”
Management expects only low single-digit growth in Cash App’s roughly 59 million monthly actives, so growth has to come from deeper use. Fewer than 10 million are primary banking actives, meaning they deposit a paycheck or route enough spending through Cash App Card or Cash App Pay. Ahuja said those customers are “delivering gross profit 10x greater than a peer-to-peer active is.” By her round numbers, about 20 million more use Cash App Card without banking there, and about 30 million use the app without the card.
Primary banking actives grew 17% in Q2. The 10x figure compares banking customers with peer-to-peer users, so converting existing card users would add less. Baird raised its target to $106 from $105 on October 2 and kept an Outperform rating. That target sits above the Street mean of about $98.
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A Longer Loan That Raises Losses on Purpose
Banking is one engine; lending is the other. Consumer lending originations grew 59% in Q2. Ahuja said risk loss grew faster, mainly because newer products and newer customers carry higher loss rates. Part of the increase is deliberate: Block is moving Cash App Borrow from four-week to six-week loans, which lets it price slightly higher. “So this shift from 4 weeks to 6 weeks is an accretive shift to us, albeit it comes with higher loss rates,” she said. Borrowing limits stayed flat through the change, and she described raising them as a future opportunity. Consumer spending and repayment rates stayed resilient through July and August, she added.
Two caveats apply. First, not every profit line beat. In Q2 2026, EBITDA of $1,168.6 million beat estimates by 10.22%, and free cash flow of $967 million beat by 103.62%, per TIKR. EBIT of $446.87 million missed by 30.71%, even as Block said adjusted operating income topped its own guidance. Second, Block carries a reserve for an unresolved Department of Justice inquiry. It disputes the agency’s assessment and has warned the final cost could exceed the amount accrued.
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TIKR Advanced Model Analysis
- Current Price: $77.24
- Target Price (Mid): ~$151
- Potential Total Return: ~96%
- Annualized IRR: ~17% / year
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The TIKR mid-case is a scenario rather than a forecast. It reaches around $151 by December 31, 2030, from the $77.24 entry price. Across the model’s 2025 to 2035 forecast window, the mid-case inputs are revenue growth around 8% a year, a net income margin near 13%, and a P/E that drifts slightly lower. That means the return depends on earnings growth rather than a higher multiple.
Revenue rides on Cash App banking conversion and Square’s newer sales channels. In Q2, field sales doubled, new volume added versus Q4 2025, and Block’s 200 independent sales operators delivered 150% quarter-over-quarter growth. Margins lean on the 50% incremental margins Block posted in Q2. Credit is the main risk. Faster conversion is the upside; losses outrunning the extra pricing on six-week loans are the downside.
Conclusion
November 3 is the first test. Block guided Q3 gross profit to around $3.1 billion, up about 18%. A print at or above that, with primary banking actives still growing in the high teens, supports the conversion case. Faster growth in risk loss would mean six-week loans cost more than they earn.
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So what is Block stock actually worth?
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
