BLOCK INC (SQ) Fundamental Analysis & Valuation

NYSE:SQ • US8522341036

Current stock price

86.96 USD
+0.58 (+0.67%)
At close:
87.17 USD
+0.21 (+0.24%)
After Hours:

This SQ fundamental analysis includes valuation metrics, fair value assessment, financial health analysis, profitability trends, growth metrics and dividend sustainability analysis.

4

1. SQ Profitability Analysis

1.1 Basic Checks

  • SQ had positive earnings in the past year.
  • In the past year SQ had a positive cash flow from operations.
  • Of the past 5 years SQ 4 years were profitable.
  • SQ had a positive operating cash flow in each of the past 5 years.
SQ Yearly Net Income VS EBIT VS OCF VS FCFSQ Yearly Net Income VS EBIT VS OCF VS FCFYearly Net Income VS EBIT VS OCF VS FCF 2016 2017 2018 2019 2020 2021 2022 2023 0 200M -200M 400M -400M 600M 800M

1.2 Ratios

  • SQ's Return On Assets of 3.11% is fine compared to the rest of the industry. SQ outperforms 65.69% of its industry peers.
  • With a Return On Equity value of 5.67%, SQ perfoms like the industry average, outperforming 43.14% of the companies in the same industry.
  • SQ has a Return On Invested Capital of 4.42%. This is in the better half of the industry: SQ outperforms 64.71% of its industry peers.
Industry RankSector Rank
ROA 3.11%
ROE 5.67%
ROIC 4.42%
ROA(3y)-0.2%
ROA(5y)1.96%
ROE(3y)0.66%
ROE(5y)6.36%
ROIC(3y)N/A
ROIC(5y)N/A
SQ Yearly ROA, ROE, ROICSQ Yearly ROA, ROE, ROICYearly ROA, ROE, ROIC 2016 2017 2018 2019 2020 2021 2022 2023 0 10 -10 20 -20

1.3 Margins

  • SQ's Profit Margin of 4.73% is on the low side compared to the rest of the industry. SQ is outperformed by 60.78% of its industry peers.
  • In the last couple of years the Profit Margin of SQ has declined.
  • Looking at the Operating Margin, with a value of 6.18%, SQ is doing worse than 61.76% of the companies in the same industry.
  • In the last couple of years the Operating Margin of SQ has grown nicely.
  • With a Gross Margin value of 36.06%, SQ perfoms like the industry average, outperforming 53.92% of the companies in the same industry.
  • SQ's Gross Margin has declined in the last couple of years.
Industry RankSector Rank
OM 6.18%
PM (TTM) 4.73%
GM 36.06%
OM growth 3Y1.34%
OM growth 5Y2.41%
PM growth 3Y-72.91%
PM growth 5YN/A
GM growth 3Y5.97%
GM growth 5Y-2.83%
SQ Yearly Profit, Operating, Gross MarginsSQ Yearly Profit, Operating, Gross MarginsYearly Profit, Operating, Gross Margins 2016 2017 2018 2019 2020 2021 2022 2023 0 10 -10 20 30 40

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6

2. SQ Health Analysis

2.1 Basic Checks

  • SQ has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
  • SQ has more shares outstanding than it did 1 year ago.
  • SQ has a worse debt/assets ratio than last year.
SQ Yearly Shares OutstandingSQ Yearly Shares OutstandingYearly Shares Outstanding 2016 2017 2018 2019 2020 2021 2022 2023 200M 400M 600M
SQ Yearly Total Debt VS Total AssetsSQ Yearly Total Debt VS Total AssetsYearly Total Debt VS Total Assets 2016 2017 2018 2019 2020 2021 2022 2023 10B 20B 30B

2.2 Solvency

  • An Altman-Z score of 3.13 indicates that SQ is not in any danger for bankruptcy at the moment.
  • SQ has a Altman-Z score of 3.13. This is amongst the best in the industry. SQ outperforms 84.31% of its industry peers.
  • The Debt to FCF ratio of SQ is 9.86, which is on the high side as it means it would take SQ, 9.86 years of fcf income to pay off all of its debts.
  • SQ has a Debt to FCF ratio (9.86) which is in line with its industry peers.
  • A Debt/Equity ratio of 0.30 indicates that SQ is not too dependend on debt financing.
  • SQ has a better Debt to Equity ratio (0.30) than 61.76% of its industry peers.
Industry RankSector Rank
Debt/Equity 0.3
Debt/FCF 9.86
Altman-Z 3.13
ROIC/WACC0.51
WACC8.63%
SQ Yearly LT Debt VS Equity VS FCFSQ Yearly LT Debt VS Equity VS FCFYearly LT Debt VS Equity VS FCF 2016 2017 2018 2019 2020 2021 2022 2023 0 5B 10B 15B

2.3 Liquidity

  • A Current Ratio of 2.07 indicates that SQ has no problem at all paying its short term obligations.
  • With a decent Current ratio value of 2.07, SQ is doing good in the industry, outperforming 75.49% of the companies in the same industry.
  • SQ has a Quick Ratio of 2.06. This indicates that SQ is financially healthy and has no problem in meeting its short term obligations.
  • The Quick ratio of SQ (2.06) is better than 76.47% of its industry peers.
Industry RankSector Rank
Current Ratio 2.07
Quick Ratio 2.06
SQ Yearly Current Assets VS Current LiabilitesSQ Yearly Current Assets VS Current LiabilitesYearly Current Assets VS Current Liabilites 2016 2017 2018 2019 2020 2021 2022 2023 5B 10B 15B

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WACCDebt/EquityHow to determine the health of a companyAltman-Z scoreShow peers with great health

8

3. SQ Growth Analysis

3.1 Past

  • SQ shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 99.36%, which is quite impressive.
  • SQ shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 31.23% yearly.
  • The Revenue has grown by 14.75% in the past year. This is quite good.
  • Measured over the past years, SQ shows a very strong growth in Revenue. The Revenue has been growing by 46.05% on average per year.
EPS 1Y (TTM)99.36%
EPS 3Y29.72%
EPS 5Y31.23%
EPS Q2Q%60%
Revenue 1Y (TTM)14.75%
Revenue growth 3Y32.14%
Revenue growth 5Y46.05%
Sales Q2Q%6.38%

3.2 Future

  • The Earnings Per Share is expected to grow by 34.31% on average over the next years. This is a very strong growth
  • Based on estimates for the next years, SQ will show a quite strong growth in Revenue. The Revenue will grow by 11.81% on average per year.
EPS Next Y102.87%
EPS Next 2Y61.85%
EPS Next 3Y47.31%
EPS Next 5Y34.31%
Revenue Next Year11.42%
Revenue Next 2Y11.39%
Revenue Next 3Y11.45%
Revenue Next 5Y11.81%

3.3 Evolution

  • When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.
  • The estimated forward Revenue growth is still strong, although it is decreasing when compared to the stronger growth in the past years.
SQ Yearly Revenue VS EstimatesSQ Yearly Revenue VS EstimatesYearly Revenue VS Estimates 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 10B 20B 30B 40B 50B
SQ Yearly EPS VS EstimatesSQ Yearly EPS VS EstimatesYearly EPS VS Estimates 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 0 2 4 6 8 10

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4

4. SQ Valuation Analysis

4.1 Price/Earnings Ratio

  • The Price/Earnings ratio is 27.96, which means the current valuation is very expensive for SQ.
  • Compared to the rest of the industry, the Price/Earnings ratio of SQ indicates a slightly more expensive valuation: SQ is more expensive than 60.78% of the companies listed in the same industry.
  • Compared to an average S&P500 Price/Earnings ratio of 25.51, SQ is valued at the same level.
  • The Price/Forward Earnings ratio is 18.54, which indicates a rather expensive current valuation of SQ.
  • SQ's Price/Forward Earnings is on the same level as the industry average.
  • When comparing the Price/Forward Earnings ratio of SQ to the average of the S&P500 Index (22.76), we can say SQ is valued inline with the index average.
Industry RankSector Rank
PE 27.96
Fwd PE 18.54
SQ Price Earnings VS Forward Price EarningsSQ Price Earnings VS Forward Price Earnings ChartPrice Earnings - Forward Price Earnings PE FPE 5 10 15 20 25

4.2 Price Multiples

  • The rest of the industry has a similar Enterprise Value to EBITDA ratio as SQ.
  • SQ's Price/Free Cash Flow is on the same level as the industry average.
Industry RankSector Rank
P/FCF 75.17
EV/EBITDA 27.68
SQ Per share dataSQ EPS, Sales, OCF, FCF, BookValue per sharePer Share Data Per Share 10 20 30

4.3 Compensation for Growth

  • SQ's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
  • A more expensive valuation may be justified as SQ's earnings are expected to grow with 47.31% in the coming years.
PEG (NY)0.27
PEG (5Y)0.9
EPS Next 2Y61.85%
EPS Next 3Y47.31%

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Price/EarningsPrice/FCFFCF per shareEV/EBITDAPEG RATIOShow best valued peers

0

5. SQ Dividend Analysis

5.1 Amount

  • SQ does not give a dividend.
Industry RankSector Rank
Dividend Yield N/A

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SQ Fundamentals: All Metrics, Ratios and Statistics

BLOCK INC

NYSE:SQ (1/17/2025, 8:04:00 PM)

After market: 87.17 +0.21 (+0.24%)

86.96

+0.58 (+0.67%)

Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupFinancial Services
GICS IndustryFinancial Services
Earnings (Last)11-07
Earnings (Next)02-20
Inst OwnersN/A
Inst Owner Change-0.99%
Ins OwnersN/A
Ins Owner Change0%
Market Cap53.90B
Revenue(TTM)23.86B
Net Income(TTM)1.13B
Analysts80.36
Price Target100.49 (15.56%)
Short Float %N/A
Short RatioN/A
Dividend
Industry RankSector Rank
Dividend Yield N/A
Yearly DividendN/A
Dividend Growth(5Y)N/A
DPN/A
Div Incr Years0
Div Non Decr Years0
Ex-DateN/A
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)2.63%
Min EPS beat(2)-2.11%
Max EPS beat(2)7.38%
EPS beat(4)2
Avg EPS beat(4)-1.39%
Min EPS beat(4)-25.8%
Max EPS beat(4)14.99%
EPS beat(8)5
Avg EPS beat(8)-0.13%
EPS beat(12)8
Avg EPS beat(12)6.56%
EPS beat(16)11
Avg EPS beat(16)22.13%
Revenue beat(2)0
Avg Revenue beat(2)-5.9%
Min Revenue beat(2)-7.02%
Max Revenue beat(2)-4.77%
Revenue beat(4)0
Avg Revenue beat(4)-3.52%
Min Revenue beat(4)-7.02%
Max Revenue beat(4)-0.63%
Revenue beat(8)3
Avg Revenue beat(8)-0.64%
Revenue beat(12)3
Avg Revenue beat(12)-1.54%
Revenue beat(16)4
Avg Revenue beat(16)-0.05%
PT rev (1m)6.1%
PT rev (3m)13.05%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-2.73%
EPS NY rev (1m)0%
EPS NY rev (3m)-2.23%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-3.69%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-1.47%
Valuation
Industry RankSector Rank
PE 27.96
Fwd PE 18.54
P/S 2.26
P/FCF 75.17
P/OCF 60.18
P/B 2.71
P/tB 8.6
EV/EBITDA 27.68
EPS(TTM)3.11
EY3.58%
EPS(NY)4.69
Fwd EY5.39%
FCF(TTM)1.16
FCFY1.33%
OCF(TTM)1.45
OCFY1.66%
SpS38.5
BVpS32.14
TBVpS10.11
PEG (NY)0.27
PEG (5Y)0.9
Graham NumberN/A
Profitability
Industry RankSector Rank
ROA 3.11%
ROE 5.67%
ROCE 5.6%
ROIC 4.42%
ROICexc 6.65%
ROICexgc 30.21%
OM 6.18%
PM (TTM) 4.73%
GM 36.06%
FCFM 3%
ROA(3y)-0.2%
ROA(5y)1.96%
ROE(3y)0.66%
ROE(5y)6.36%
ROIC(3y)N/A
ROIC(5y)N/A
ROICexc(3y)N/A
ROICexc(5y)N/A
ROICexgc(3y)N/A
ROICexgc(5y)N/A
ROCE(3y)N/A
ROCE(5y)N/A
ROICexgc growth 3Y-0.41%
ROICexgc growth 5Y5.31%
ROICexc growth 3Y-32.39%
ROICexc growth 5Y-14.18%
OM growth 3Y1.34%
OM growth 5Y2.41%
PM growth 3Y-72.91%
PM growth 5YN/A
GM growth 3Y5.97%
GM growth 5Y-2.83%
F-Score7
Asset Turnover0.66
Health
Industry RankSector Rank
Debt/Equity 0.3
Debt/FCF 9.86
Debt/EBITDA 3.18
Cap/Depr 45.51%
Cap/Sales 0.75%
Interest Coverage 10.59
Cash Conversion 47.98%
Profit Quality 63.5%
Current Ratio 2.07
Quick Ratio 2.06
Altman-Z 3.13
F-Score7
WACC8.63%
ROIC/WACC0.51
Cap/Depr(3y)104.3%
Cap/Depr(5y)111.99%
Cap/Sales(3y)1.13%
Cap/Sales(5y)1.23%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)99.36%
EPS 3Y29.72%
EPS 5Y31.23%
EPS Q2Q%60%
EPS Next Y102.87%
EPS Next 2Y61.85%
EPS Next 3Y47.31%
EPS Next 5Y34.31%
Revenue 1Y (TTM)14.75%
Revenue growth 3Y32.14%
Revenue growth 5Y46.05%
Sales Q2Q%6.38%
Revenue Next Year11.42%
Revenue Next 2Y11.39%
Revenue Next 3Y11.45%
Revenue Next 5Y11.81%
EBIT growth 1Y302.85%
EBIT growth 3Y33.91%
EBIT growth 5Y49.57%
EBIT Next Year1780.32%
EBIT Next 3Y204.1%
EBIT Next 5Y109.97%
FCF growth 1Y329.62%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y175.67%
OCF growth 3Y-35.8%
OCF growth 5Y-19.31%

BLOCK INC / SQ Fundamental Analysis FAQ

What is the ChartMill fundamental rating of BLOCK INC (SQ) stock?

ChartMill assigns a fundamental rating of 5 / 10 to SQ.


Can you provide the valuation status for BLOCK INC?

ChartMill assigns a valuation rating of 3 / 10 to BLOCK INC (SQ). This can be considered as Overvalued.


How profitable is BLOCK INC (SQ) stock?

BLOCK INC (SQ) has a profitability rating of 4 / 10.


What is the earnings growth outlook for BLOCK INC?

The Earnings per Share (EPS) of BLOCK INC (SQ) is expected to grow by 102.87% in the next year.