BLOCK INC (SQ) Stock Fundamental Analysis
NYSE:SQ - New York Stock Exchange, Inc. - US8522341036 - Common Stock - Currency: USD
Taking everything into account, SQ scores 5 out of 10 in our fundamental rating. SQ was compared to 101 industry peers in the Financial Services industry. SQ has an average financial health and profitability rating. SQ is not priced too expensively while it is growing strongly. Keep and eye on this one!
1. Profitability
1.1 Basic Checks
In the past year SQ was profitable.
In the past year SQ had a positive cash flow from operations.
SQ had positive earnings in 4 of the past 5 years.
Each year in the past 5 years SQ had a positive operating cash flow.
1.2 Ratios
Looking at the Return On Assets, with a value of 3.11%, SQ is in the better half of the industry, outperforming 65.69% of the companies in the same industry.
With a Return On Equity value of 5.67%, SQ perfoms like the industry average, outperforming 43.14% of the companies in the same industry.
Looking at the Return On Invested Capital, with a value of 4.42%, SQ is in the better half of the industry, outperforming 64.71% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.11% | ||
| ROE | 5.67% | ||
| ROIC | 4.42% |
ROA(3y)-0.2%
ROA(5y)1.96%
ROE(3y)0.66%
ROE(5y)6.36%
ROIC(3y)N/A
ROIC(5y)N/A
1.3 Margins
SQ's Profit Margin of 4.73% is on the low side compared to the rest of the industry. SQ is outperformed by 60.78% of its industry peers.
In the last couple of years the Profit Margin of SQ has declined.
The Operating Margin of SQ (6.18%) is worse than 61.76% of its industry peers.
In the last couple of years the Operating Margin of SQ has grown nicely.
SQ has a Gross Margin of 36.06%. This is comparable to the rest of the industry: SQ outperforms 53.92% of its industry peers.
SQ's Gross Margin has declined in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 6.18% | ||
| PM (TTM) | 4.73% | ||
| GM | 36.06% |
OM growth 3Y1.34%
OM growth 5Y2.41%
PM growth 3Y-72.91%
PM growth 5YN/A
GM growth 3Y5.97%
GM growth 5Y-2.83%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so SQ is destroying value.
SQ has more shares outstanding than it did 1 year ago.
The number of shares outstanding for SQ has been increased compared to 5 years ago.
Compared to 1 year ago, SQ has a worse debt to assets ratio.
2.2 Solvency
An Altman-Z score of 3.13 indicates that SQ is not in any danger for bankruptcy at the moment.
With an excellent Altman-Z score value of 3.13, SQ belongs to the best of the industry, outperforming 84.31% of the companies in the same industry.
SQ has a debt to FCF ratio of 9.86. This is a negative value and a sign of low solvency as SQ would need 9.86 years to pay back of all of its debts.
SQ has a Debt to FCF ratio (9.86) which is comparable to the rest of the industry.
SQ has a Debt/Equity ratio of 0.30. This is a healthy value indicating a solid balance between debt and equity.
SQ has a Debt to Equity ratio of 0.30. This is in the better half of the industry: SQ outperforms 61.76% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.3 | ||
| Debt/FCF | 9.86 | ||
| Altman-Z | 3.13 |
ROIC/WACC0.51
WACC8.63%
2.3 Liquidity
A Current Ratio of 2.07 indicates that SQ has no problem at all paying its short term obligations.
SQ has a Current ratio of 2.07. This is in the better half of the industry: SQ outperforms 75.49% of its industry peers.
A Quick Ratio of 2.06 indicates that SQ has no problem at all paying its short term obligations.
Looking at the Quick ratio, with a value of 2.06, SQ is in the better half of the industry, outperforming 76.47% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.07 | ||
| Quick Ratio | 2.06 |
3. Growth
3.1 Past
SQ shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 99.36%, which is quite impressive.
SQ shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 31.23% yearly.
SQ shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 14.75%.
The Revenue has been growing by 46.05% on average over the past years. This is a very strong growth!
EPS 1Y (TTM)99.36%
EPS 3Y29.72%
EPS 5Y31.23%
EPS Q2Q%60%
Revenue 1Y (TTM)14.75%
Revenue growth 3Y32.14%
Revenue growth 5Y46.05%
Sales Q2Q%6.38%
3.2 Future
SQ is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 34.31% yearly.
Based on estimates for the next years, SQ will show a quite strong growth in Revenue. The Revenue will grow by 11.81% on average per year.
EPS Next Y102.87%
EPS Next 2Y61.85%
EPS Next 3Y47.31%
EPS Next 5Y34.31%
Revenue Next Year11.42%
Revenue Next 2Y11.39%
Revenue Next 3Y11.45%
Revenue Next 5Y11.81%
3.3 Evolution
The EPS growth rate is stable: in the next years the growth will be about the same than in the last years.
The estimated forward Revenue growth is still strong, although it is decreasing when compared to the stronger growth in the past years.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 27.96, the valuation of SQ can be described as expensive.
60.78% of the companies in the same industry are cheaper than SQ, based on the Price/Earnings ratio.
SQ's Price/Earnings ratio indicates a similar valuation than the S&P500 average which is at 25.82.
Based on the Price/Forward Earnings ratio of 18.54, the valuation of SQ can be described as rather expensive.
SQ's Price/Forward Earnings ratio is in line with the industry average.
SQ is valuated at similar levels of the S&P average when we compare the Price/Forward Earnings ratio to 21.76, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 27.96 | ||
| Fwd PE | 18.54 |
4.2 Price Multiples
SQ's Enterprise Value to EBITDA ratio is in line with the industry average.
SQ's Price/Free Cash Flow ratio is in line with the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 75.17 | ||
| EV/EBITDA | 27.68 |
4.3 Compensation for Growth
SQ's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
SQ's earnings are expected to grow with 47.31% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.27
PEG (5Y)0.9
EPS Next 2Y61.85%
EPS Next 3Y47.31%
5. Dividend
5.1 Amount
No dividends for SQ!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
86.96
+0.58 (+0.67%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupFinancial Services
GICS IndustryFinancial Services
Earnings (Last)
Earnings (Next)
Inst OwnersN/A
Inst Owner Change-0.13%
Ins OwnersN/A
Ins Owner Change-1.2%
Market Cap53.90B
Analysts80.36
Price Target100.49 (15.56%)
Short Float %N/A
Short RatioN/A
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
Yearly DividendN/A
Dividend Growth(5Y)N/A
DPN/A
Div Incr Years0
Div Non Decr Years0
Ex-DateN/A
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)2.63%
Min EPS beat(2)-2.11%
Max EPS beat(2)7.38%
EPS beat(4)2
Avg EPS beat(4)-1.39%
Min EPS beat(4)-25.8%
Max EPS beat(4)14.99%
EPS beat(8)5
Avg EPS beat(8)-0.13%
EPS beat(12)8
Avg EPS beat(12)6.56%
EPS beat(16)11
Avg EPS beat(16)22.13%
Revenue beat(2)0
Avg Revenue beat(2)-5.9%
Min Revenue beat(2)-7.02%
Max Revenue beat(2)-4.77%
Revenue beat(4)0
Avg Revenue beat(4)-3.52%
Min Revenue beat(4)-7.02%
Max Revenue beat(4)-0.63%
Revenue beat(8)3
Avg Revenue beat(8)-0.64%
Revenue beat(12)3
Avg Revenue beat(12)-1.54%
Revenue beat(16)4
Avg Revenue beat(16)-0.05%
PT rev (1m)6.1%
PT rev (3m)13.05%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-2.73%
EPS NY rev (1m)0%
EPS NY rev (3m)-2.23%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-3.69%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-1.47%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 27.96 | ||
| Fwd PE | 18.54 | ||
| P/S | 2.26 | ||
| P/FCF | 75.17 | ||
| P/OCF | 60.18 | ||
| P/B | 2.71 | ||
| P/tB | 8.6 | ||
| EV/EBITDA | 27.68 |
EPS(TTM)3.11
EY3.58%
EPS(NY)4.69
Fwd EY5.39%
FCF(TTM)1.16
FCFY1.33%
OCF(TTM)1.45
OCFY1.66%
SpS38.5
BVpS32.14
TBVpS10.11
PEG (NY)0.27
PEG (5Y)0.9
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.11% | ||
| ROE | 5.67% | ||
| ROCE | 5.6% | ||
| ROIC | 4.42% | ||
| ROICexc | 6.65% | ||
| ROICexgc | 30.21% | ||
| OM | 6.18% | ||
| PM (TTM) | 4.73% | ||
| GM | 36.06% | ||
| FCFM | 3% |
ROA(3y)-0.2%
ROA(5y)1.96%
ROE(3y)0.66%
ROE(5y)6.36%
ROIC(3y)N/A
ROIC(5y)N/A
ROICexc(3y)N/A
ROICexc(5y)N/A
ROICexgc(3y)N/A
ROICexgc(5y)N/A
ROCE(3y)N/A
ROCE(5y)N/A
ROICexcg growth 3Y-0.41%
ROICexcg growth 5Y5.31%
ROICexc growth 3Y-32.39%
ROICexc growth 5Y-14.18%
OM growth 3Y1.34%
OM growth 5Y2.41%
PM growth 3Y-72.91%
PM growth 5YN/A
GM growth 3Y5.97%
GM growth 5Y-2.83%
F-Score7
Asset Turnover0.66
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.3 | ||
| Debt/FCF | 9.86 | ||
| Debt/EBITDA | 3.18 | ||
| Cap/Depr | 45.51% | ||
| Cap/Sales | 0.75% | ||
| Interest Coverage | 10.59 | ||
| Cash Conversion | 47.98% | ||
| Profit Quality | 63.5% | ||
| Current Ratio | 2.07 | ||
| Quick Ratio | 2.06 | ||
| Altman-Z | 3.13 |
F-Score7
WACC8.63%
ROIC/WACC0.51
Cap/Depr(3y)104.3%
Cap/Depr(5y)111.99%
Cap/Sales(3y)1.13%
Cap/Sales(5y)1.23%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)99.36%
EPS 3Y29.72%
EPS 5Y31.23%
EPS Q2Q%60%
EPS Next Y102.87%
EPS Next 2Y61.85%
EPS Next 3Y47.31%
EPS Next 5Y34.31%
Revenue 1Y (TTM)14.75%
Revenue growth 3Y32.14%
Revenue growth 5Y46.05%
Sales Q2Q%6.38%
Revenue Next Year11.42%
Revenue Next 2Y11.39%
Revenue Next 3Y11.45%
Revenue Next 5Y11.81%
EBIT growth 1Y302.85%
EBIT growth 3Y33.91%
EBIT growth 5Y49.57%
EBIT Next Year1780.32%
EBIT Next 3Y204.1%
EBIT Next 5Y109.97%
FCF growth 1Y329.62%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y175.67%
OCF growth 3Y-35.8%
OCF growth 5Y-19.31%