Block Inc. (NYSE:XYZ) stock is rising amid broader market momentum and a bullish analyst note.
The company is accelerating product launches and sales efforts, a pace that supports an encouraging early outlook for fiscal 2027, according to RBC Capital Markets analyst Daniel Perlin.
In a note on Tuesday, Perlin kept an Outperform rating on the stock and raised his price forecast to $103 from $95.
Perlin wrote that Block “continues to accelerate its product velocity & go-to-market motion.” He cited monthly active users reaching 60 million, up 4% from a year earlier, and Square gross payment volume (GPV), the total value of payments processed, rising 14%. He described that as the strongest growth since the first quarter of 2023.
Square Growth Drivers
Perlin said Square gross profit growth matched GPV growth, helped by higher volume, more software adoption and Square loans.
Only 16% of U.S. sellers used paid software on the platform as of September, which he said points to room to sell more.
Cash App And Neighborhoods
Perlin credited the Neighborhoods initiative for much of the user growth. Neighborhoods reached about 500,000 active users in September. Consumer lending originations on Cash App rose 40% to $19 billion.
These gains followed third-quarter results in which total gross profit rose 21.6% to $3.235 billion and adjusted operating income rose 92% to $923 million.
Early Fiscal 2027 Outlook
Management’s preliminary fiscal 2027 outlook calls for gross profit growth of 15% or more and adjusted operating income growth of 30%. Perlin wrote that the early read into fiscal year 2027 is “encouraging.” Management said the outlook does not depend on Neighborhoods or its AI products.
Perlin’s $103 forecast equals about 20 times its fiscal 2027 price-to-earnings ratio, a measure of stock price against profit per share.
Risks Perlin Notes
Perlin identified two areas of pushback. Block is shifting toward products with higher losses and higher margins, which raises overall loss rates and could expose the company if the economy weakens.
Neighborhoods is also expected to add only a modest amount of gross profit in fiscal 2027, and its monetization model remains unclear.
XYZ Price Action: Block shares were up 15.71% at $87.94 at the time of publication on Wednesday. The stock is trading at a new 52-week high, according to Benzinga Pro data.
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