.September 9, 2024 3:53 PM

New Street Research analysts initiated coverage on Block Inc. (NYSE:SQ) with a Neutral rating and a $70 price target. They believe co-founder Jack Dorsey’s return could drive strategic success by addressing operational issues and driving merchant growth, creating a more balanced ecosystem alongside Cash App.

However, Square faces challenges like potential revenue declines and competition from Venmo. A meaningful turnaround isn’t expected before early 2025, with current initiatives still in early stages. Integration of buy-now-pay-later into Cash App by year-end could contribute to long-term growth.

Despite challenges, the stock isn’t considered expensive, with a low enterprise value per Cash App subscriber. However, analysts prefer PayPal due to stronger valuation metrics.