This 'Buy Now Pay Later' Stock Gets Downgraded Again Within A Week

  • Mizuho analyst Dan Dolev downgraded Block, Inc SQ to Neutral from Buy with a price target of $57, down from $125. 
  • After years of being deemed the most innovative name in payments, "user fatigue, plateauing inflows, loss of the best-of-breed" point of sale status, and buy now pay later "misexecution" are blocking Block's growth, Dolev noted. 
  • Block "still has enormous potential, but it is not being realized." 
  • Also Read: Payment Firms Square, PayPal Get Widely Different Views In Eyes Of Wall Street Amid BNPL Woes, Juicy Margins
  • Instead, BNPL estimates continue to come down & projects like Bitcoin, which accounts for <5% of gross profit, seem to preoccupy management's attention disproportionately. 
  • He believes Block shares no longer deserve a premium valuation relative to the U.S. payments sector.
  • Recently Dolev recommended buying shares of Affirm Holdings, Inc AFRM on weakness following plans of a government crackdown on the BNPL sector.
  • Dolev considered the Consumer Financial Protection Bureau's buy now pay later report as "less harmful than feared." 
  • The "lack of a clear call for action is a positive," he noted.
  • Price Action: SQ shares traded lower by 5.97% at $55.90 on the last check Thursday.
Market News and Data brought to you by Benzinga APIs
Comments
Loading...
date
ticker
name
Price Target
Upside/Downside
Recommendation
Firm
Posted In: Analyst ColorNewsDowngradesPrice TargetAnalyst RatingsTechBriefs
Benzinga simplifies the market for smarter investing

Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.

Join Now: Free!