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Highlights
- Block Inc shares will trade under the ticker "XYZ" on the ASX from 22 January 2024, replacing the current "SQ2" code.
- Analysts see strong growth potential for the company's Cash App and Square divisions, even after recent share price gains.
- Leading investment funds, including Elvest Fund, have made Block Inc a top holding, citing robust long-term opportunities.
Payments giant Block Inc (currently trading as ASX:SQ2) has announced a ticker change for its Australian and US-listed shares. From 22 January 2024, the company’s shares will trade under the new ticker code "XYZ" on the ASX boards.
This move marks a new chapter for the ASX 200 growth stock, which has captured attention with its innovative financial solutions through Cash App and Square. But beyond the ticker change, investors are wondering: Is Block Inc a good buy at current levels?
What Are Analysts Saying?
Recent commentary from leading investment funds highlights optimism about Block Inc’s growth prospects, even after a strong performance in December.
The ECP Growth Companies Fund expressed confidence in Block’s ability to deliver accelerating growth in the coming years. Its analysts noted:
"Block Inc (SQ2) outperformed during December, driven by positive investor sentiment following guidance on accelerating Square gross payment volume growth in the US. This growth is expected to ramp linearly through 2025 as the expanding field-sales team becomes productive. Despite recent gains, the stock remains attractively valued at less than 25x 2026 EBIT, offering potential for a significantly higher share price as execution improves."
Similarly, the Elvest Fund is bullish on Block Inc’s long-term prospects, recently naming the company as one of its top five holdings. In its latest monthly report, the fund manager said:
"Block Inc (SQ2), now a top 5 holding, has numerous compelling growth opportunities within its consumer-focused Cash App and merchant-focused Square divisions. Combined with recent cost-cutting measures, the company is positioned for a period of strong earnings growth."
Key Drivers of Growth
Both Cash App and Square are central to analysts’ positive outlook for Block. Cash App continues to gain traction among consumers, while Square’s solutions for merchants are driving gross payment volume growth. Additionally, the company’s cost-cutting initiatives are expected to enhance profitability, further supporting its valuation.
