What's In Store For Block's Q4 Earnings? Analysts Spotlight On CEO Jack Dorsey's Actions To Boost Square's GPV Growth

J.P.Morgan analyst Tien-tsin Huang reiterated the Overweight rating on Block, Inc. SQ, with a forecast of $90.

Block will release its fourth quarter and full year of 2023 results after the bell on Thursday, February 22, 2024.

Compared to the previous quarter’s lead-up, there has been a “quieter” call flow on Block in the quarter to be reported, per the analyst. 

Questions mainly focus on CEO Jack Dorsey’s potential actions to boost Square’s GPV growth, particularly after assuming leadership of the seller ecosystem. 

Additionally, inquiries revolve around management’s dedication to cost management and demonstrating operational leverage, the analyst adds.

Huang expects the management to take the bold step of setting Rule of 40 targets by 2026 (earlier than consensus expected). 

According to the analyst, continued momentum in this aspect remains crucial, as investors seek sustained prioritization of cost efficiency alongside growth and product velocity.

The analyst sees the company’s U.S. network volumes decelerating ~1ppt sequentially in the fourth quarter, which is in-line with Huang’s Square GPV forecast (decelerating 1ppt from 3Q).

The analyst adds that slower January trends driven by severe weather will likely impact the company’s first-quarter outlook.

For 2024, the Square GPV growth are in the low-double digit ballpark, adds the analyst.

Price Action: SQ shares are trading lower by 0.91% to $65.04 on the last check Tuesday.

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