Block Inc (XYZ) Stock Forecast & Price Target

Block's positive outlook is supported by its projected incremental margins, anticipated to grow each year, alongside a significant increase in loan originations for Cash App Borrow, which has expanded by 5x over the past two years. For fiscal year 2026, Block expects a robust 17% year-over-year gross profit growth to approximately $11.98 billion and a 31% increase in adjusted operating income to around $2.70 billion, indicating strong financial health. Additionally, the company is positioned for sustained growth through strategic investments in self-onboarding, marketing efforts, and partnerships, alongside a balanced integration of its Square and Cash App services, which is expected to drive long-term profitability.

Block's negative outlook stems from several fundamental concerns, primarily its reliance on small to medium-sized businesses (SMBs) which are vulnerable to economic downturns and a potential slowdown in consumer retail sales. The company's transformation efforts have yet to yield significant improvements, as indicated by stagnant volume growth and an inadequate execution strategy, exacerbating investor skepticism about future profitability. Additionally, Block's valuation appears unfavorable, trading at an FY26 EV/EBITDA multiple of approximately 8.5x, which is significantly lower than the industry average of around 20x, suggesting market doubts regarding its growth prospects and operational effectiveness.