Block (SQ) Stock Still Looks Undervalued Despite Its 71% Five Year Fall

Simply Wall St.

Aug 20

Block stock is caught between two different valuation signals. The Excess Returns intrinsic value estimate points to meaningful upside from the current US$79.43 share price, while earnings based ...

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The Excess Returns intrinsic value estimate points to meaningful upside from the current US$79.43 share price, while earnings based ...</p>\n\n<a href=\"https://simplywall.st/stocks/us/diversified-financials/nyse-xyz/block/news/block-sq-stock-still-looks-undervalued-despite-its-71-five-y\">Source Link</a>\n\n</div>\n","source":"simplywall_highlight","html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Block (SQ) Stock Still Looks Undervalued Despite Its 71% Five Year Fall</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nBlock (SQ) Stock Still Looks Undervalued Despite Its 71% Five Year Fall\n</h2>\n\n<h4 class=\"meta\">\n\n\n2026-08-20 01:24 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://simplywall.st/stocks/us/diversified-financials/nyse-xyz/block/news/block-sq-stock-still-looks-undervalued-despite-its-71-five-y><strong>Simply Wall St.</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Block stock is caught between two different valuation signals. The Excess Returns intrinsic value estimate points to meaningful upside from the current US$79.43 share price, while earnings based ...</p>\n\n<a href=\"https://simplywall.st/stocks/us/diversified-financials/nyse-xyz/block/news/block-sq-stock-still-looks-undervalued-despite-its-71-five-y\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"LU1861559042.SGD","symbol_name":"日兴方舟颠覆性创新基金B SGD","start_time":0,"source_url":"https://simplywall.st/stocks/us/diversified-financials/nyse-xyz/block/news/block-sq-stock-still-looks-undervalued-despite-its-71-five-y","article_id":"2660270704","we_media_id":null,"thumbnails":["https://images.simplywall.st/asset/company-cover/83920810-main-header/1756256220800"],"rights":{"source":"simplywall_highlight","url":"https://simplywall.st/stocks/us/diversified-financials/nyse-xyz/block/news/block-sq-stock-still-looks-undervalued-despite-its-71-five-y","rn_cache_url":null,"directOrigin":true},"url":"https://stock-news.laohu8.com/highlight/detail?id=2660270704","pubTimestamp":1787160262,"columns":[],"sourceInfo":{"source_id":"simplywall_highlight","name":"Simply Wall St."},"weMediaInfo":null,"summary":"Block stock is caught between two different valuation signals. The Excess Returns intrinsic value estimate points to meaningful upside from the current US$79.43 share price, while earnings based multiples flag the stock as expensive compared with its fundamentals.\n\nBlock has declined 70.6% over the past 5 years, which leaves long term holders with a weak result and makes today’s entry point more sensitive to valuation.\nRecent AI driven restructuring and product rollout can support margin and...","collect":0,"end_time":0,"defaultTopTitle":"simplywall.st","property":[],"viewcount":null,"language":"en","relate_stocks":{"LU1861559042.SGD":"日兴方舟颠覆性创新基金B SGD","IE00B19Z3581.USD":"Legg Mason ClearBridge - Value A Acc USD","XYZ":"Block, Inc.","VGFPF":"Vanguard Funds PLC","IE00BHPRN162.USD":"BNY MELLON BLOCKCHAIN INNOVATION \"B\" (USD) ACC","LU2360107671.USD":"BGF FINTECH \"A4\" (USD) INC","LU0106831901.USD":"贝莱德世界金融基金A2","VOTE":"TCW Transform 500 ETF","BK4588":"碎股","LU1668664300.SGD":"Blackrock World Financials A2 SGD-H","GXDW":"Global X Dorsey Wright Thematic ETF","IE00B19Z3B42.SGD":"Legg Mason ClearBridge - Value A Acc SGD","LU2211815571.USD":"ALLIANZ POSITIVE CHANGE \"AT\" (USD) ACC","DECU":"AllianzIM U.S. Equity Buffer15 Uncapped Dec ETF","DAPP":"VanEck Digital Transformation ETF","BK4227":"交易和支付处理服务","BK4598":"佩洛西持仓","IE0002270589.USD":"LEGG MASON CLEARBRIDGE VALUE \"A\" (USD) INC","FEBU":"AllianzIM U.S. Equity Buffer15 Uncapped Feb ETF","LU1861558580.USD":"日兴方舟颠覆性创新基金B","PMDE":"PGIM S&P 500 Max Buffer ETF - December","LU0174119429.USD":"T ROWE PRICE US LARGE CAP GROWTH EQUITY \"A\" ACC","RGLO":"Global Equity Active ETF","LU1791807156.HKD":"BGF WORLD FINANCIALS \"A2\" (HKDHDG) ACC","LU1861217088.USD":"贝莱德金融科技A2","XYZG":"2倍做多XYZ ETF- Leverage Shares","LU2462591350.SGD":"T ROWE PRICE US LARGE CAP GROWTH EQUITY \"AN\" (SGDHDG) ACC","LU2211817866.USD":"Allianz Food Security AT Acc USD","LU1861220207.SGD":"Blackrock FinTech A2 SGD-H","BK4585":"ETF&股票定投概念","JOYT":"JPMorgan Equity and Options Total Return ETF","XYZY":"XYZ期权收益策略ETF-YieldMax"},"translate_title":"尽管 Block (SQ) 股票五年下跌 71%，但看起来仍被低估","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"VOTE":0.84,"DAPP":1.5,"DECU":0.84,"XYZG":0.6,"FEBU":0.84,"XYZY":0.6,"PMDE":0.84,"XYZ":1,"GXDW":0.84,"RGLO":0.84,"VGFPF":0.84,"JOYT":0.84},"content_text":"Block stock is caught between two different valuation signals. The Excess Returns intrinsic value estimate points to meaningful upside from the current US$79.43 share price, while earnings based multiples flag the stock as expensive compared with its fundamentals.  Block has declined 70.6% over the past 5 years, which leaves long term holders with a weak result and makes today’s entry point more sensitive to valuation. Recent AI driven restructuring and product rollout can support margin and cash flow expectations, while reliance on user growth and transaction volumes remains a key risk if these trends soften. The broader checks are mixed rather than conclusive, with Block passing 3 of 6 valuation tests according to our value score.  For investors, the debate is whether Block’s current price leans closer to the upside suggested by the intrinsic value estimate or the caution implied by the richer market multiples. Block delivered 6.9% returns over the last year. See how this stacks up to the rest of the Diversified Financial industry. AdvertisementDoes Block Look Undervalued on Excess Returns? The Excess Returns model looks at how efficiently Block turns its equity base into profits above its estimated cost of equity. Block is assumed to earn a stable earnings power of $5.62 per share on a book value base of $36.70 per share, which implies an average return on equity of 12.32%. With a cost of equity of $3.45 per share and an excess return of $2.17 per share, the model projects value creation on top of a higher future equity base, using a stable book value estimate of $45.62 per share. That stream of excess returns leads to an intrinsic value estimate of $101.98 per share, compared with the current $79.43 price. This implies Block screens as about 22.1% undervalued on this method. Because the recent AI driven restructuring lifted margins and reshaped growth expectations, the current discount suggests the market is still cautious about how durable those returns will be. On the Excess Returns view, Block stock currently looks undervalued relative to the earnings power implied by its equity base. Our Excess Returns analysis suggests Block is undervalued by 22.1%. Track this in your watchlist or portfolio, or discover 50 more high quality undervalued stocks. XYZ Discounted Cash Flow as at Aug 2026 Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Block. Has Block Run Too Far on Earnings? The P/E ratio is a useful lens for Block because earnings are becoming a more important part of the story alongside its payments and software ecosystem. Block trades at about 133.6x earnings, which is far above the diversified financial industry average of 17.5x and well above the peer group average of 12.5x. The fair P/E ratio implied by the model is 35.7x, so the current multiple is several times higher than what the company specific inputs would suggest. This gap indicates investors are paying a high price for each dollar of Block’s earnings. The difference between the current P/E and the modelled fair ratio is large enough that it is better read as a warning signal rather than a precise target. The framework is heavily penalising Block’s risk profile and the quality of earnings, so the current valuation screens as rich even before comparing it to sector norms. On the P/E multiple, Block stock currently screens as overvalued relative to both its tailored fair ratio and broader industry benchmarks. NYSE:XYZ P/E Ratio as at Aug 2026 See what the numbers say about this price — find out in our valuation breakdown. The Block Narrative: What Would Justify Today's Price? Simply Wall St Narratives aim to connect Block's current valuation puzzle with the specific expectations that would need to play out for the stock to be worth materially more or less than today’s price, based on growth, margins and earnings. Each narrative ties its number to a clear view on how Block's growth, profitability and risk profile could evolve, which you can revisit as fresh financial results and operating data emerge on the Community page. Investor narratives on Block are pulling in very different directions, with one camp focused on product driven upside and another on mounting structural risks. Bull case: 19% undervalued \"Continued expansion of embedded banking and lending products (Borrow and BNPL) within Cash App, fueled by proprietary credit scoring and increasing eligibility/limits, is opening new user cohorts and higher ARPU segments...\" Read the full Bull Case to see why Block could be undervalued Bear case: 11% overvalued \"Fierce competition from both established players and new market entrants is expected to intensify and commoditize core payment and financial services, forcing lower transaction fees across the industry and compressing Block's net margins as it struggles to defend its market share...\" Read the full Bear Case to see why Block could be overvalued Do you think there's more to the story for Block? Head over to our Community to see what others are saying! The Bottom Line Block’s intrinsic value work using the Excess Returns model points to meaningful upside, while the P/E view flags the stock as clearly overvalued relative to both its tailored fair ratio and peers. That split reflects two different lenses. Intrinsic value leans on the durability of earnings on the equity base and the funding and reinvestment needs. Market multiples are more about how confident investors feel in Block’s growth, margin path and risk profile today. The key question from here is whether Block can deliver margins and cash flows that justify its rich multiple, or whether the current discount to intrinsic value proves to be a value trap.  This article by Simply Wall St is general in nature. We provide commentary based on historical data\n        and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your\n        financial situation. We aim to bring you long-term focused analysis driven by fundamental data.\n        Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.\n        Simply Wall St has no position in any stocks mentioned.Valuation is complex, but we're here to simplify it.Discover if Block might be undervalued or overvalued with our detailed analysis, featuring fair value estimates, potential risks, dividends, insider trades, and its financial condition.Access Free AnalysisHave feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com","kind":"highlight","is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":false,"editions":null,"column":"","sentiment":"1","news_tag":"","news_rank":0,"isVideo":false,"video":null,"symbols":[],"gpt_button":0,"need_auth":false,"need_login_tip":false,"code":"91000000","status":"200"}}}