Block, Inc. Fundamental Analysis
Block, Inc. (SQ) shows weak financial fundamentals with a PE ratio of 64.20, profit margin of -2.04%, and ROE of -2.26%. The company generates $25.4B in annual revenue with N/A year-over-year growth of N/A.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 42.0/100 based on profitability, valuation, growth, and balance sheet metrics. The D grade reflects weak fundamentals and significant financial concerns.
Fundamental Health Score
We analyze SQ's fundamental strength across five key dimensions:
Efficiency Score
WeakSQ struggles to generate sufficient returns from assets.
Valuation Score
ModerateSQ shows balanced valuation metrics.
Growth Score
ModerateSQ shows steady but slowing expansion.
Financial Health Score
ExcellentSQ maintains a strong and stable balance sheet.
Profitability Score
WeakSQ struggles to sustain strong margins.
Key Financial Metrics
Is SQ Expensive or Cheap?
P/E Ratio
SQ trades at 64.20 times earnings. This suggests a premium valuation.
PEG Ratio
When adjusting for growth, SQ's PEG of -0.93 indicates potential undervaluation.
Price to Book
The market values Block, Inc. at 2.30 times its book value. This may indicate undervaluation.
EV/EBITDA
Enterprise value stands at 27.33 times EBITDA. This signals the market has high growth expectations.
How Well Does SQ Make Money?
Net Profit Margin
For every $100 in sales, Block, Inc. keeps $-2.04 as profit after all expenses.
Operating Margin
Core operations generate 4.93 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $-2.26 in profit for every $100 of shareholder equity.
ROA
Block, Inc. generates $-1.25 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Block, Inc. produces operating cash flow of $3.54B, showing steady but balanced cash generation.
Free Cash Flow
Block, Inc. generates strong free cash flow of $3.38B, providing ample flexibility for dividends, buybacks, or growth.
FCF Per Share
Each share generates $5.45 in free cash annually.
FCF Yield
SQ converts 6.30% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
64.20
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
-0.93
vs 25 benchmark
P/B Ratio
Price to book value ratio
2.30
vs 25 benchmark
P/S Ratio
Price to sales ratio
2.11
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
0.07
vs 25 benchmark
Current Ratio
Current assets to current liabilities
1.99
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
-0.02
vs 25 benchmark
ROA
Return on assets percentage
-0.01
vs 25 benchmark
ROCE
Return on capital employed
0.04
vs 25 benchmark
How SQ Stacks Against Its Sector Peers
| Metric | SQ Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 64.20 | 34.68 | Worse (Expensive) |
| ROE | -2.26% | 672.00% | Weak |
| Net Margin | -2.04% | 10024586197.00% | Weak |
| Debt/Equity | 0.07 | 0.46 | Strong (Low Leverage) |
| Current Ratio | 1.99 | 4.91 | Neutral |
| ROA | -1.25% | 151.00% | Weak |
SQ outperforms its industry in 1 out of 6 key metrics, but lagging in P/E Ratio.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Block, Inc.'s 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
N/A
Industry Style: Growth, Innovation, High Beta
EPS CAGR
N/A
Industry Style: Growth, Innovation, High Beta
FCF CAGR
N/A
Industry Style: Growth, Innovation, High Beta