BLOCK INC (SQ3.DE) Stock Fundamental Analysis

Europe - Frankfurt Stock Exchange - FRA:SQ3 - US8522341036 - Common Stock

57.45 EUR

+1.99 (+3.59%)

Last: 1/23/2026, 7:00:00 PM

Fundamental Rating

Taking everything into account, SQ3 scores 5 out of 10 in our fundamental rating. SQ3 was compared to 60 industry peers in the Financial Services industry. Both the profitability and the financial health of SQ3 get a neutral evaluation. Nothing too spectacular is happening here. SQ3 is quite expensive at the moment. It does show a decent growth rate.

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1. Profitability

1.1 Basic Checks

SQ3 had positive earnings in the past year.
SQ3 had a positive operating cash flow in the past year.
Of the past 5 years SQ3 4 years were profitable.
In the past 5 years SQ3 always reported a positive cash flow from operatings.

1.2 Ratios

The Return On Assets of SQ3 (8.00%) is better than 90.00% of its industry peers.
SQ3 has a better Return On Equity (13.93%) than 68.33% of its industry peers.
SQ3 has a Return On Invested Capital of 5.59%. This is in the better half of the industry: SQ3 outperforms 66.67% of its industry peers.

		Industry Rank	Sector Rank
ROA	8%
ROE	13.93%
ROIC	5.59%

ROA(3y)2.06%

ROA(5y)1.89%

ROE(3y)3.51%

ROE(5y)4.71%

ROIC(3y)N/A

ROIC(5y)N/A

1.3 Margins

SQ3 has a Profit Margin of 13.08%. This is comparable to the rest of the industry: SQ3 outperforms 53.33% of its industry peers.
SQ3's Profit Margin has improved in the last couple of years.
SQ3 has a Operating Margin (9.62%) which is in line with its industry peers.
SQ3's Operating Margin has improved in the last couple of years.
The Gross Margin of SQ3 (40.87%) is comparable to the rest of the industry.
SQ3's Gross Margin has declined in the last couple of years.

		Industry Rank	Sector Rank
OM	9.62%
PM (TTM)	13.08%
GM	40.87%

OM growth 3Y43.23%

OM growth 5Y16.51%

PM growth 3Y133.66%

PM growth 5Y8.56%

GM growth 3Y13.77%

GM growth 5Y-1.67%

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ROA

ROE

ROIC

Operating and Profit Margin

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2. Health

2.1 Basic Checks

The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so SQ3 is destroying value.
SQ3 has more shares outstanding than it did 1 year ago.
SQ3 has more shares outstanding than it did 5 years ago.
The debt/assets ratio for SQ3 is higher compared to a year ago.

2.2 Solvency

An Altman-Z score of 2.72 indicates that SQ3 is not a great score, but indicates only limited risk for bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 2.72, SQ3 is in the better half of the industry, outperforming 70.00% of the companies in the same industry.
The Debt to FCF ratio of SQ3 is 4.25, which is a neutral value as it means it would take SQ3, 4.25 years of fcf income to pay off all of its debts.
Looking at the Debt to FCF ratio, with a value of 4.25, SQ3 is in the better half of the industry, outperforming 68.33% of the companies in the same industry.
A Debt/Equity ratio of 0.27 indicates that SQ3 is not too dependend on debt financing.
The Debt to Equity ratio of SQ3 (0.27) is better than 70.00% of its industry peers.

		Industry Rank	Sector Rank
Debt/Equity	0.27
Debt/FCF	4.25
Altman-Z	2.72

ROIC/WACC0.69

WACC8.04%

2.3 Liquidity

SQ3 has a Current Ratio of 2.18. This indicates that SQ3 is financially healthy and has no problem in meeting its short term obligations.
SQ3 has a Current ratio of 2.18. This is in the better half of the industry: SQ3 outperforms 73.33% of its industry peers.
SQ3 has a Quick Ratio of 2.17. This indicates that SQ3 is financially healthy and has no problem in meeting its short term obligations.
Looking at the Quick ratio, with a value of 2.17, SQ3 is in the better half of the industry, outperforming 75.00% of the companies in the same industry.

		Industry Rank	Sector Rank
Current Ratio	2.18
Quick Ratio	2.17

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WACC

Debt/Equity

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Altman-Z score

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3. Growth

3.1 Past

SQ3 shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -21.86%.
SQ3 shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 33.32% yearly.
SQ3 shows a small growth in Revenue. In the last year, the Revenue has grown by 0.47%.
The Revenue has been growing by 38.62% on average over the past years. This is a very strong growth!

EPS 1Y (TTM)-21.86%

EPS 3Y25.38%

EPS 5Y33.32%

EPS Q2Q%-38.64%

Revenue 1Y (TTM)0.47%

Revenue growth 3Y10.95%

Revenue growth 5Y38.62%

Sales Q2Q%2.33%

3.2 Future

SQ3 is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 14.30% yearly.
The Revenue is expected to grow by 10.16% on average over the next years. This is quite good.

EPS Next Y-27.45%

EPS Next 2Y0.44%

EPS Next 3Y9.5%

EPS Next 5Y14.3%

Revenue Next Year-0.17%

Revenue Next 2Y4.95%

Revenue Next 3Y6.91%

Revenue Next 5Y10.16%

3.3 Evolution

Although the future EPS growth is still strong, it is not able to hold up the even more excellent growth rate of the past years.
The estimated forward Revenue growth is still strong, although it is decreasing when compared to the stronger growth in the past years.

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4. Valuation

4.1 Price/Earnings Ratio

SQ3 is valuated quite expensively with a Price/Earnings ratio of 27.62.
SQ3's Price/Earnings ratio is in line with the industry average.
The average S&P500 Price/Earnings ratio is at 27.21. SQ3 is around the same levels.
SQ3 is valuated rather expensively with a Price/Forward Earnings ratio of 19.78.
SQ3's Price/Forward Earnings ratio is in line with the industry average.
SQ3's Price/Forward Earnings ratio indicates a similar valuation than the S&P500 average which is at 24.26.

		Industry Rank	Sector Rank
PE	27.62
Fwd PE	19.78

4.2 Price Multiples

SQ3's Enterprise Value to EBITDA is on the same level as the industry average.
SQ3's Price/Free Cash Flow is on the same level as the industry average.