Investing.com — Raymond James raised Block to Outperform from Market Perform in a note on Friday, citing increased confidence in the company’s 2025 growth trajectory.
Analysts highlighted a deeper analysis of Block’s gross seller payment amount (GPV), which they consider the stock’s most critical metric.
After a “deep dive into the components of Seller GPV,” Raymond (NS:) James expressed optimism about GPV growth potentially accelerating to low double digits in 2025, up from approximately 8% in 2024.
This expected growth stems from the “ease of doing business,” international expansion with GPV growth exceeding 20% year-to-date, improved distribution partnerships such as those with US Foods and Sysco (NYSE: ), and ongoing product innovation.
Raymond James noted that a challenging environment in 2024, including small single-digit same-store sales (SSS) declines, sets the stage for easier comparisons in 2025.
They estimate that SSS will return to modest growth, adding to profits driven by new client acquisitions. “We believe growth can accelerate back to double digits in ’25,” the company said.
Despite a recent 33% increase in Block’s stock price over the past three months, Raymond James sees the valuation as compelling.
They explain that the stock trades at 16 times estimated 2026 adjusted EBITDA, including stock-based compensation, compared to a peer average of 20 times.
Analysts believe this valuation is justified given Block’s faster EBITDA and free cash flow (FCF) growth compared to its peers.
The company set a $115 price target for Block, reflecting a 22x multiple of 2026 estimated adjusted EBITDA.
“We believe the valuation is more than attractive at current levels,” the analysts said, adding that management’s focus on improving EBITDA and FCF quality should further improve the stock’s multiple.
Raymond James concluded it was “about time,” signaling their renewed confidence in Block’s potential to outperform its competitors.
