Block's stock has suffered in a 'dismal' fintech market. But these new forecasts are drawing cheers.

By Emily Bary

The parent company of Square and Cash App offered an upbeat long-term earnings outlook at its first investor day since 2022

Block operates the Square business, which sells payment technology to restaurants and stores.

The financial-technology sector has struggled to live up to its pandemic-era heyday, and that has meant some pain for Block investors recently.

Heading into Wednesday, shares of Block (XYZ) had lost 12% over the past three years, as the S&P 500 SPX has advanced 67%. They had also lost 71% over five years, while the S&P 500 climbed 86%.

"No matter what Block has tried over a fairly sustained period of time, it simply has not been resonating with investors," Seaport Research analyst Jeff Campbell wrote after the company's last earnings report. "What the 'scoreboard' clearly shows is [Block's] performance over the past three years is nothing to write home about - and its five-year performance is flat-out ugly to us," though it admittedly has been affected by general pressure on fintech valuations since the pandemic.

Now Block, the parent company of Square and Cash App, is trying once again to reset the narrative. It hosted its first investor day since 2022 and put fresh numbers around its financial opportunity, sending its stock more than 7% higher in Wednesday's action.

While the FactSet consensus doesn't have estimates for all of the 2028 projections Block provided, it does have them for some, such as adjusted earnings per share. Block is modeling $5.50 on that metric, while analysts had been expecting just $4.76.

Block is also calling for about $15.8 billion in gross profit by 2028, reflecting a mid-teens annual growth rate until then, as well as upward of $4 billion in adjusted cash flow, which the company expects to represent about 25% of gross profit within three years.

"Performance against these targets, with possible upside, should drive multiple expansion, in our view," wrote William Blair analyst Andrew Jeffrey, referencing the stock's ability to fetch a higher valuation.

Over a shorter span, Block expects $11.98 billion in 2026 gross profit, along with $3.20 in adjusted earnings per share. The FactSet consensus calls for $11.78 billion and $3.24, respectively.

"We don't think our stock price today reflects the strength of the underlying fundamentals across our business," Chief Financial Officer Amrita Ahuja told MarketWatch.

She said Block has become a more "mature" company in the past three years, with a greater focus on profits and organizational structure. The company has emphasized cost efficiencies, sought to improve product development through artificial intelligence and deployed co-founder and CEO Jack Dorsey in a more hands-on role within the Square merchant business.

"Our view is that Block is innovating at a meaningfully faster pace than traditional fintech peers," Jeffrey wrote.

The Square unit, which offers payment technology to merchants, has been a source of consternation lately, partly as volume growth has outpaced gross-profit growth, raising questions about the profitability of incremental business.

Read on: Block's third-quarter results top expectations, but a few nitpicks weigh on the stock

Ahuja, though, said the discrepancy relates more to "transitory" factors than underlying business issues. The company has made upfront hardware investments that it expects to earn back over time as customers on its platform increase, and it's been experiencing higher processing costs with one of its partners but expects that impact to fade in the second quarter of 2026.

"If you normalize for those elements, what you'll see from [the first to the second to the third quarter] this year is actually accelerating gross-profit growth in each of those quarters, back in line or even slightly ahead of [gross payment volume] by the time you get to [the third quarter]," she said.

Prior to the analyst day, Jeffrey spied opportunity for Square, as rival Clover, which is part of the beleaguered Fiserv (FISV), has leveraged pricing to drive what he thinks is unsustainable revenue growth.

"After lagging some competitors over the last few years, we think Square is on the front foot, as it accelerates product releases, particularly in the critical food and beverage vertical," he wrote after Wednesday's event.

See more: Fiserv's stock plunges 40% on worst day ever. Outlook reset is deemed 'difficult to comprehend.'

Ahuja said Square has seen new customers come on to its platform, which could make 2025 the strongest year for additional volume in the company's history.

"The core question is: How is Square positioned competitively and to deliver value for our customers? And we think that there is a tremendous runway for growth for Square," she said.

Block is also focused on driving synergies between its businesses - not just Square and the Cash App peer-to-peer payment service, but also Afterpay, the buy-now-pay-later platform that's been integrated across various Block offerings. The company has become more "interconnected," Ahuja said.

Additionally, Block is boosting its share-buyback program by $5 billion. As of Sept. 30, it had $1.1 billion left from a prior $4 billion authorization.

Before the analyst day, Jeffrey said Block was looking "to re-engage investors in a dismal fintech market." Afterwards, he encouraged investors to buy the stock and take advantage of its recent underperformance.

"The three-year targets laid out by management at today's Investor Day seem robust," added Seaport's Campbell, though he said "the question is whether or not they ultimately do play out as oftentimes in the past Block has strayed from its longer-term targets." He stuck with his neutral rating on the stock.

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-Emily Bary

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11-19-25 1838ET