Why Block Stock Was Up 24% Last Month
Shares of financial-technology (fintech) company Block (NYSE: SQ) were up 23.8% in July, according to data provided by S&P Global Market Intelligence. This increase was in stark contrast to commentary from the analyst community, which overwhelmingly downgraded Block stock throughout the month.
However, fintech investors surprisingly responded positively to inflation data. This boosted Block stock and helped it outperform the 9.1% gain of the S&P 500.
To understand why the analyst community was lowering expectations for Block left and right in July, it's important to understand the company's business composition. Slightly more than half of the company's gross profit in the first quarter of 2022 came from Block's Square segment, which primarily serves small- and medium-sized businesses. These are particularly vulnerable to recessions.
Source Fool.com
