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 100 industry peers in the Financial Services industry. SQ has an average financial health and profitability rating. SQ is showing excellent growth while it is valued at reasonable prices. Keep and eye on this one!
1. Profitability
1.1 Basic Checks
SQ had positive earnings in the past year.
In the past year SQ had a positive cash flow from operations.
Of the past 5 years SQ 4 years were profitable.
Each year in the past 5 years SQ had a positive operating cash flow.
1.2 Ratios
SQ's Return On Assets of 3.11% is fine compared to the rest of the industry. SQ outperforms 65.69% of its industry peers.
SQ's Return On Equity of 5.67% is in line compared to the rest of the industry. SQ outperforms 43.14% of its industry peers.
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
The Profit Margin of SQ (4.73%) is worse than 60.78% of its industry peers.
SQ's Profit Margin has declined in the last couple of years.
The Operating Margin of SQ (6.18%) is worse than 61.76% of its industry peers.
SQ's Operating Margin has improved in the last couple of years.
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
SQ has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
SQ has more shares outstanding than it did 1 year ago.
SQ has more shares outstanding than it did 5 years ago.
SQ has a worse debt/assets ratio than last year.
2.2 Solvency
SQ has an Altman-Z score of 3.13. This indicates that SQ is financially healthy and has little risk of 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.
With a Debt to FCF ratio value of 9.86, SQ perfoms like the industry average, outperforming 50.98% of the companies in the same industry.
A Debt/Equity ratio of 0.30 indicates that SQ is not too dependend on debt financing.
The Debt to Equity ratio of SQ (0.30) is better than 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
SQ has a Current Ratio of 2.07. This indicates that SQ is financially healthy and has no problem in meeting its short term obligations.
With a decent Current ratio value of 2.07, SQ is doing good in the industry, outperforming 75.49% of the companies in the same industry.
SQ has a Quick Ratio of 2.06. This indicates that SQ is financially healthy and has no problem in meeting its short term obligations.
SQ's Quick ratio of 2.06 is fine compared to the rest of the industry. SQ outperforms 76.47% of its industry peers.
| 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.
The Earnings Per Share has been growing by 31.23% on average over the past years. This is a very strong growth
The Revenue has grown by 14.75% in the past year. This is quite good.
Measured over the past years, SQ shows a very strong growth in Revenue. The Revenue has been growing by 46.05% on average per year.
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
The Earnings Per Share is expected to grow by 34.31% on average over the next years. This is a very strong growth
The Revenue is expected to grow by 11.81% on average over the next years. This is quite good.
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
A Price/Earnings ratio of 27.96 indicates a quite expensive valuation of SQ.
Based on the Price/Earnings ratio, SQ is valued a bit more expensive than the industry average as 60.78% of the companies are valued more cheaply.
Compared to an average S&P500 Price/Earnings ratio of 26.92, SQ is valued at the same level.
A Price/Forward Earnings ratio of 18.54 indicates a rather expensive valuation of SQ.
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 21.49, 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
The rest of the industry has a similar Enterprise Value to EBITDA ratio as SQ.
The rest of the industry has a similar Price/Free Cash Flow ratio as SQ.
| 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.
A more expensive valuation may be justified as SQ's earnings are expected to grow with 47.31% in the coming years.
PEG (NY)0.27
PEG (5Y)0.9
EPS Next 2Y61.85%
EPS Next 3Y47.31%
5. Dividend
5.1 Amount
SQ does not give a dividend.
| 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-0.12%
Ins OwnersN/A
Ins Owner Change-0.13%
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%