Everyone's Down on Block. Here's Why I Love It
Block's (NYSE: SQ) fourth-quarter 2022 earnings were a mixed bag. On the one hand, revenue of $4.65 billion and gross profit of $1.66 billion beat Wall Street estimates. On the other hand, adjusted earnings per share (EPS) of $0.22 were well below the $0.30 that analysts had expected. Nonetheless, investors were pleased with the results, with shares popping 8% following the news.
But Block remains under pressure. After hitting an all-time high of $281.81 in August 2021, this top fintech stock has lost 72% of its value (as of this writing). Even though Block is down big, I still love it as an investment. Here's why.
Probably the best reason to love Block is its two budding ecosystems. The Square segment provides various hardware, software, and financial services products to smaller merchants to help them accept card payments, handle payroll and invoices, and manage rewards programs, among other services. Fourth-quarter gross profit for this division was up 22% year over year to $801 million. And Q4 gross payment volume totaled $48.6 billion, a 14% increase year over year. Bringing on a greater number of higher-volume merchants helped.
Source Fool.com
