Block (NYSE:XYZ) Releases Earnings Results, Beats Expectations By $0.41 EPS

Key Points

• Block reported a quarterly EPS of $0.62, exceeding analysts' expectations of $0.21 by $0.41.
• The company's revenue for the quarter was $6.05 billion, slightly below the consensus estimate of $6.32 billion, representing a 1.6% decline from the previous year.
• Despite strong earnings results, Block's stock price dropped $3.47 to $73.38 in mid-day trading following the announcement.

Block (NYSE:XYZ - Get Free Report) released its earnings results on Thursday, August 7th. The technology company reported $0.62 earnings per share for the quarter, beating analysts' consensus estimates of $0.21 by $0.41, Zacks reports. Block had a return on equity of 7.85% and a net margin of 12.32%. The firm had revenue of $6.05 billion during the quarter, compared to the consensus estimate of $6.32 billion. Block's revenue was down 1.6% on a year-over-year basis.

Block Stock Down 1.1%

XYZ stock traded down $0.82 during trading on Thursday, reaching $76.13. 6,555,443 shares of the stock were exchanged, compared to its average volume of 18,080,674. The firm's 50 day moving average is $70.47 and its 200 day moving average is $65.44. Block has a twelve month low of $44.27 and a twelve month high of $99.26. The company has a current ratio of 1.96, a quick ratio of 2.27 and a debt-to-equity ratio of 0.16. The firm has a market cap of $46.82 billion, a P/E ratio of 16.30, a price-to-earnings-growth ratio of 3.39 and a beta of 2.71.

Insider Buying and Selling at Block

In related news, insider Dhananjay Prasanna sold 11,318 shares of the company's stock in a transaction that occurred on Tuesday, May 27th. The stock was sold at an average price of $61.41, for a total transaction of $695,038.38. Following the transaction, the insider directly owned 318,751 shares of the company's stock, valued at approximately $19,574,498.91. This represents a 3.43% decrease in their position. The transaction was disclosed in a filing with the Securities & Exchange Commission, which can be accessed through the SEC website. Also, CFO Amrita Ahuja sold 16,358 shares of the company's stock in a transaction that occurred on Monday, July 21st. The stock was sold at an average price of $78.60, for a total value of $1,285,738.80. Following the transaction, the chief financial officer directly owned 308,397 shares in the company, valued at approximately $24,240,004.20. This trade represents a 5.04% decrease in their ownership of the stock. The disclosure for this sale can be found here. Insiders sold 95,438 shares of company stock worth $6,217,707 in the last quarter. Company insiders own 10.85% of the company's stock.

Institutional Inflows and Outflows

A number of institutional investors have recently added to or reduced their stakes in XYZ. Viking Global Investors LP purchased a new stake in shares of Block in the second quarter worth approximately $368,213,000. California State Teachers Retirement System purchased a new stake in shares of Block during the second quarter valued at approximately $58,278,000. Sei Investments Co. purchased a new stake in shares of Block during the second quarter valued at approximately $31,006,000. Alliancebernstein L.P. purchased a new stake in shares of Block during the second quarter valued at approximately $30,108,000. Finally, MIRAE ASSET GLOBAL ETFS HOLDINGS Ltd. purchased a new stake in shares of Block during the second quarter valued at approximately $27,141,000. 70.44% of the stock is owned by institutional investors and hedge funds.

Wall Street Analyst Weigh In

A number of research firms have recently commented on XYZ. Morgan Stanley boosted their price target on Block from $73.00 to $77.00 and gave the stock an "equal weight" rating in a report on Monday. Piper Sandler reissued an "underweight" rating and set a $58.00 price target (up previously from $50.00) on shares of Block in a report on Friday, August 8th. Wells Fargo & Company cut Block from an "overweight" rating to an "equal weight" rating and lowered their price target for the stock from $95.00 to $50.00 in a report on Friday, May 2nd. Royal Bank Of Canada reissued an "outperform" rating and set a $97.00 price target (up previously from $63.00) on shares of Block in a report on Friday, August 8th. Finally, The Goldman Sachs Group lowered their price target on Block from $65.00 to $57.00 and set a "buy" rating for the company in a report on Friday, May 2nd. Three research analysts have rated the stock with a sell rating, nine have issued a hold rating, twenty-five have given a buy rating and one has issued a strong buy rating to the company. Based on data from MarketBeat, the stock presently has an average rating of "Moderate Buy" and a consensus price target of $79.24.

About Block

Square, Inc provides payment and point-of-sale solutions in the United States and internationally. The company's commerce ecosystem includes point-of-sale software and hardware that enables sellers to turn mobile and computing devices into payment and point-of-sale solutions. It offers hardware products, including Magstripe reader, which enables swiped transactions of magnetic stripe cards; Contactless and chip reader that accepts EMV® chip cards and Near Field Communication payments; Chip card reader, which accepts EMV® chip cards and enables swiped transactions of magnetic stripe cards; Square Stand, which enables an iPad to be used as a payment terminal or full point of sale solution; and Square Register that combines its hardware, point-of-sale software, and payments technology, as well as managed payments solutions.