The stock of Block (SQ) is down 7% after the financial technology company reported third-quarter revenue that missed Wall Street targets.
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The company led by Jack Dorsey announced earnings per share (EPS) of $0.88, which was inline with Wall Street expectations. However, revenue of $5.98 billion fell short of the $6.24 billion forecast among analysts.
Block, formerly known as Square, said that its Cash App mobile payment platform had a $1.31 billion gross profit, which was up 21% year-over-year. Monthly active users on the Cash App increased 11% from a year earlier to more than 24 million.
Guidance and Stock Performance
In terms of forward guidance, Block said that it expects gross profit for the current fourth quarter of the year of $2.31 billion, which would represent 14% annualized growth. The company serves 56 million users and four million businesses, processing $228 billion in payments each year.
SQ stock has underperformed the market this year and is essentially flat since January, having risen only 0.37%. Over the past five years, the company’s share price has increased 24%, also trailing the broader market.
Is SQ Stock a Buy?
Despite today’s share price plunge, SQ stock holds a consensus rating of Strong Buy among 27 Wall Street analysts. That rating is based on 22 Buy, four Hold, and one Sell recommendations made in the last three months. The average SQ price target of $88.43 implies 17.48% upside from current levels.
