Compass Point initiates Buy rating on Block, sees potential growth in Cash App

From Financial Modeling Prep: 2025-07-02 15:18:00

Compass Point initiated coverage on Block (NYSE:XYZ) with a Buy rating and an $80 price target, citing undervaluation in Cash App and potential margin upside from lending expansion. Investors assign Chime 20x 2027 EBITDA, indicating significant re-rating potential for Cash App. The firm’s analysis sees Cash App trading at around 10x EV/EBITDA currently.

Three reasons to own Block shares: Cash App undervalued compared to Chime, Cash App Borrow lending products expected to boost gross profit, and 2026 forecasts ahead of consensus on gross profit and adjusted EBITDA. Compass Point anticipates a reacceleration in Block’s gross profit growth starting in the second half of 2025, leading to potential upside revaluation.



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