Lowering Our Fair Value Estimate for Block as We Lower Our Long-Term Margin Assumptions

We are lowering our fair value estimate for narrow-moat Block to $104 from $124 per share. After reassessing our assumptions, we are lowering our long-term margin assumptions, as we have been disappointed by the lack of progress on this front recently. Our fair value estimate equates to 62.9 times adjusted 2023 earnings. While shares appear undervalued, we would highlight our very high uncertainty rating. Block is a fast-growing, potentially highly scalable business, which creates a wide range of possibilities.