Block (SQ) shares jumped more than 7% in premarket trading Friday after the company reported fiscal first-quarter earnings and revenue that beat analysts’ expectations.
The financial technology provider reported earnings per share (EPS) of $0.85 for the quarter, beating the consensus estimate of $0.72. Revenue was $5.96 billion, also topping estimates of $5.83 billion.
Following this compelling release, Block is raising its full-year financial guidance.
The company now projects bottom line gross profit of $8.78 billion for the year, up 17% from the prior year. Additionally, expected adjusted operating income is set at a minimum of US$1.30 billion, indicating a margin of 15% for the full year.
In the earnings report, analysts at Wolfe Research raised their price target on the stock from $100 to $105, reiterating an outperform rating.
Overall, we continue to view SQ as one of the more innovative names in our coverage, with technology differentiation that we believe should drive market share gains for both Square and Cash App over the long term,” the analysts said.
“However, we recognize an element of uncertainty in the business, particularly at Square, and believe evidence of stability/volatility in GPV and GP growth remains necessary for the stock to perform meaningfully over the long term,” they added.