Block Shares Rise After Company Announces 3-Year Plan for Faster Growth and Bigger Stock Buyback

Block’s Shares Jump After Strong Future Growth Plans

Block, the company led by Jack Dorsey, saw its stock price rise after it shared an optimistic three-year financial plan. The company expects to grow faster and earn much higher profits by 2028.

At its first investor day since 2022, Block said it aims to grow its gross profit by around 15% every year, reaching about $15.8 billion by 2028, according to CNBC.

Right before the announcement, Block’s stock trading was temporarily paused. Once trading restarted, the stock jumped around 8% to $62.

Block also expects its operating income to grow about 30% per year, reaching more than $4.6 billion by 2028. The company believes its earnings per share will also rise by over 30% each year.

To increase shareholder value, Block also expanded its stock buyback plan by $5 billion, in addition to the $1.1 billion remaining from its previous plan.

This positive outlook came shortly after Block reported strong profit growth but lower-than-expected revenue. The company’s shares had been falling for three weeks, dropping to just above $57, before bouncing back after this announcement.

Analysts from William Blair believe Block is in a strong position, especially as more consumers turn to app-based borrowing tools. They noted that Cash App’s Borrow feature grew by 134%, and they think Block’s stock is undervalued, with over 40% potential upside.

Block’s Square business (for merchant payments) is also improving with better technology and wider reach.

Block is also growing in the crypto space. Cash App now supports stablecoins and Lightning-based bitcoin payments, making it more connected with Square’s merchant network.