Block positioned to ride rising demand for on-demand liquidity in fintech apps: analysts
Analysts believe Block is well-positioned for growth due to increasing demand for its Cash App borrowing features.Summary
William Blair analysts maintain an Outperform rating on Block, asserting that the fintech company is strategically placed to capitalize on the growing need for on-demand liquidity tools in digital finance. This optimism is driven by accelerating gross profit growth, margin expansion, and the rising adoption of Cash App's borrowing features, which grew 134% year-over-year. Analysts noted that the product's quick four-week payback window and Block's data-driven lending models keep losses low (under 3%) while generating strong returns. Furthermore, Square, Block's merchant business, is regaining momentum with updated lending models, expected to shrink the gap between money flowing through its systems and generated profit. Cash App is also expanding crypto integration, recently adding support for Bitcoin Lightning and stablecoin payments, linking its consumer and merchant networks. Despite a recent stock dip tracking Bitcoin's price, William Blair projects over 40% upside for Block shares in the next year.
(Source：The Block)