Block Sees Strong Growth in Fourth Quarter

Block delivered strong growth in the fourth quarter, with overall revenue increasing 29% year over year. Block continues to build out its Cash App business, and its Square operations are bouncing back from the pandemic. While the company’s top-line performance remains impressive, translating that growth into better profitability remains an issue. We will maintain our $115 fair value estimate and narrow moat rating. While the stock looks somewhat undervalued at the moment, we would caution that we believe very high uncertainty surrounds the company.