Investors seeking growth at a reasonable cost should explore BLOCK INC (NYSE:XYZ).

BLOCK INC (NYSE:XYZ) was identified as an affordable growth stock by our stock screener. XYZ is showing great growth, but also scores well on profitability, solvency and liquidity. At the same time it seems to be priced reasonably. We'll explore this a bit deeper below.

Growth Analysis for XYZ

To evaluate a stock's growth potential, ChartMill utilizes a Growth Rating on a scale of 0 to 10. This comprehensive assessment considers various growth aspects, including historical and estimated EPS and revenue growth. XYZ has achieved a 8 out of 10:

• The Earnings Per Share has grown by an impressive 88.27% over the past year.
• The Earnings Per Share has been growing by 33.32% on average over the past years. This is a very strong growth
• XYZ shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 10.06%.
• Measured over the past years, XYZ shows a very strong growth in Revenue. The Revenue has been growing by 38.62% on average per year.
• Based on estimates for the next years, XYZ will show a very strong growth in Earnings Per Share. The EPS will grow by 24.52% on average per year.
• The Revenue is expected to grow by 11.55% on average over the next years. This is quite good.

Assessing Valuation for XYZ

ChartMill assigns a Valuation Rating to each stock, ranging from 0 to 10. This rating is calculated by analyzing different valuation elements, such as price to earnings and free cash flow, both in absolute terms and relative to the market and industry. In the case of XYZ, the assigned 5 reflects its valuation:

• XYZ's Price/Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 29.85.
• The average S&P500 Price/Forward Earnings ratio is at 22.57. XYZ is valued slightly cheaper when compared to this.
• Based on the Price/Free Cash Flow ratio, XYZ is valued a bit cheaper than 60.40% of the companies in the same industry.
• The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
• A more expensive valuation may be justified as XYZ's earnings are expected to grow with 23.75% in the coming years.

Evaluating Health: XYZ

ChartMill employs a unique Health Rating system for all stocks. This rating, ranging from 0 to 10, is determined by analyzing various liquidity and solvency ratios. For XYZ, the assigned 6 for health provides valuable insights:

• XYZ's Altman-Z score of 2.65 is amongst the best of the industry. XYZ outperforms 83.17% of its industry peers.
• The Debt to FCF ratio of XYZ (4.88) is better than 65.35% of its industry peers.
• XYZ has a Debt/Equity ratio of 0.30. This is a healthy value indicating a solid balance between debt and equity.
• XYZ has a better Debt to Equity ratio (0.30) than 61.39% of its industry peers.
• XYZ has a Current Ratio of 2.33. This indicates that XYZ is financially healthy and has no problem in meeting its short term obligations.
• XYZ has a Current ratio of 2.33. This is in the better half of the industry: XYZ outperforms 79.21% of its industry peers.
• A Quick Ratio of 2.33 indicates that XYZ has no problem at all paying its short term obligations.
• With an excellent Quick ratio value of 2.33, XYZ belongs to the best of the industry, outperforming 81.19% of the companies in the same industry.

How do we evaluate the Profitability for XYZ?

ChartMill's Profitability Rating offers a unique perspective on stock analysis, providing scores from 0 to 10. These ratings consider a wide range of profitability metrics and margins, both in comparison to industry peers and on their own merits. For XYZ, the assigned 5 is a significant indicator of profitability:

• XYZ's Return On Assets of 7.88% is amongst the best of the industry. XYZ outperforms 87.13% of its industry peers.
• With a decent Return On Equity value of 13.62%, XYZ is doing good in the industry, outperforming 61.39% of the companies in the same industry.
• With a decent Return On Invested Capital value of 4.72%, XYZ is doing good in the industry, outperforming 67.33% of the companies in the same industry.
• XYZ's Profit Margin has improved in the last couple of years.
• XYZ's Operating Margin has improved in the last couple of years.

More Affordable Growth stocks can be found in our Affordable Growth screener.

Our latest full fundamental report of XYZ contains the most current fundamental analsysis.

Disclaimer

This article should in no way be interpreted as advice. The article is based on the observed metrics at the time of writing, but you should always make your own analysis and trade or invest at your own responsibility.