From Yahoo Finance: 2025-05-25 08:45:00

Block’s financials are feeling the effects of ongoing economic uncertainty, with slower growth for Square and Cash App. Despite challenges, a focus on Bitcoin remains key. Shares have seen a volatile journey, down 80% from their peak. Investors are urged to consider the risks and valuation of the stock.

The first quarter financial performance disappointed investors, leading to a 20% drop in shares. Slower growth in Square and Cash App, along with stagnant user numbers, have raised concerns. Gross payment volume was below expectations, with guidance for the year falling short. The focus on smaller businesses and households adds to macroeconomic risks.

Despite challenges, the leadership remains optimistic about accelerating growth in the future. Profitability has been improving, with a focus on operational efficiencies. Initiatives around Bitcoin, including a hardware wallet and mining chips, are in progress. Increased marketing spending and a new Cash App Borrow product are expected to drive growth.

Investors need to weigh the risks, including competition and economic conditions. The stock currently trades at a discount compared to the broader market. Consider starting with a small position in Block to gauge comfort with the company. The Motley Fool does not currently recommend Block in their top 10 stocks.

The Motley Fool Stock Advisor team highlights high-growth potential stocks, with Block not making the cut. Historical examples like Netflix and Nvidia show significant returns over time. Consider joining Stock Advisor for access to their latest top 10 list. Stock Advisor has significantly outperformed the S&P 500, with a total average return of 957%.

Read more: Is Block Stock a Buy Now?