BMO Capital analyst Rufus Hone downgraded Block (SQ) to Market Perform from Outperform with a price target of $100, up from $94. The firm says it is tougher to see gross profit upside from here. With the shares up 22% since the Q3 report, this year’s “beat/raise cycle” will prove difficult to sustain in 2025 and 2026, the analyst tells investors in a research note. BMO sees potential risk to Cash App gross profit growth expectations, and believes the “Rule-of-40” target for 2026 implies a high bar for profit per employee. It worries Block’s gross profit growth upside will become increasingly challenging to deliver without lifting the headcount cap.
Don't Miss our Black Friday Offers:
- Unlock your investing potential with TipRanks Premium - Now At 40% OFF!
- Make smarter investments with weekly expert stock picks from the Smart Investor Newsletter
Published first on TheFly – the ultimate source for real-time, market-moving breaking financial news. Try Now>>
Read More on SQ:
- Block price target raised to $110 from $94 at Mizuho
- Here’s Why Block (NYSE:SQ) Could be an Attractive Growth Stock to Buy
- Block downgraded to Neutral from Outperform at Exane BNP Paribas
- Block self-custody wallet Bitkey to launch inheritance feature for customers
- Square call volume above normal and directionally bullish