Block Inc (XYZ) Stock Forecast & Price Target

Block's financial outlook is bolstered by a projected gross profit growth of 17% year-over-year for fiscal year 2026, anticipated to reach $11.98 billion, alongside a significant adjustment in operating income, expected to grow by approximately 31% year-over-year to $2.70 billion. The company's aggressive expansion in the Cash App Borrow product, which has seen loan originations increase fivefold over the past two years, demonstrates its commitment to sustainable growth while maintaining stable loss rates. Additionally, the expected annual growth of new vertical accounts (NVA) by over 15% for fiscal year 2025 reflects Block's strategic enhancements in marketing and partnerships, suggesting robust potential for ongoing revenue increases.

Block's stock outlook appears negative due to several fundamental challenges highlighted in its recent financial reports. The company's restructured sales strategy has not yet translated into growth, evidenced by stagnating new volume added, particularly in FY22-FY24, indicating ongoing execution issues. Additionally, Block's dependency on small and medium-sized businesses, coupled with a potential economic slowdown or recession impacting consumer retail sales, raises concerns about its ability to achieve projected financial targets, as reflected in the significantly lower EV/EBITDA multiple compared to industry peers.