Compass Point Starts Block Inc. (XYZ) at Buy, 'Investors should BUY XYZ ahead of this re-acceleration in fundamentals'

Compass Point analyst Dominick Gabriele initiates coverage on Block Inc. (NYSE: XYZ) with a Buy rating and a price target of $80.00.

The analyst comments "We are initiating coverage of Block, Inc. (ticker XYZ) with a BUY rating and $80 price target. Investors are willing to pay ~20x 2027 EBITDA for Chime which we view as the closest publicly traded pure play that is comparable to Cash App. Inside we provide multiple scenarios for a some of the parts analysis breaking XYZ's segments down to attributable adjusted EPS. We believe Cash App should be valued at 15x EV/adjusted EBITDA (including stock-based compensation (SBC)), given Chime's valuation and the Square segment valued at 12.1x on 2026 adjusted EBITDA (including SBC). Depending on how investors attribute valuation, Cash App could be valued at ~10x (or less) EV/EBITDA today. Three reasons to own: • Cash App undervalued vs. Chime ( CHYM : Neutral- $33 PT, Analyst Guiliano Bologna). • Cash App gross profit (GP) has upside given anticipated ramp in Cash App Borrow. • We are ~3% higher on GP and 10% higher on adjusted EBITDA than consensus for 2026 estimates, due to leverage in margins from a push to lending products. We believe investors have been waiting for XYZ's GP growth to stabilize and re-accelerate, and we anticipate this turn will begin in the 2H25. Investors should BUY XYZ ahead of this re-acceleration in fundamentals."

For an analyst ratings summary and ratings history on Block Inc. click here. For more ratings news on Block Inc. click here.

Shares of Block Inc. closed at $67.93 yesterday.

You May Also Be Interested In

• Stripe, Advent In Talks To Buy Paypal - WSJ
• AI/ML Innovations plans $2M private placement on the CSE
• Freedom Broker Upgrades Lifeway Foods (LWAY) to Buy