Notice: Undefined index: HTTP_ACCEPT_LANGUAGE in /home/stockstowatch/public_html/wp-content/mu-plugins/GrULw0.php on line 4
Notice: Undefined index: HTTP_ACCEPT_LANGUAGE in /home/stockstowatch/public_html/wp-content/mu-plugins/GrULw0.php on line 4 Block’s Cash App Not Likely To Yield Promising Margins, Analyst Says Remaining Wary Of Regulatory Headwinds – Block (NYSE:SQ) – Stocks to Watch
Faucette highlights that Cash App is a bank for Millennials and Gen Z. He thinks Block is effectively acquiring these customers (72% of 51 million users are Gen Z/Y) and can become a vital financial services provider to them as they mature and grow incomes and borrowing needs, similar to how Capital One Financial CorpCOF expanded its banking business by pursuing the Gen X population in the 1990s.
Faucette’s survey work shows that Cash App customers want a full suite of financial services. He does not expect Cash App will generate better-than-bank margins in a Tuesday note titled “Block, Inc: What If Cash App Built a Bank? Valuation & Opportunity Analysis”
He estimates Cash App can have a banking account with ~40% of the current Gen Z/Y population by 2037. He applies a standard banking multiple and an assumed discount rate to get an estimated $32 per share for Cash App + Afterpay today.
He believes detractions around AML/KYC and debit interchange revenue are well known.
The price target change reflects modest incremental uncertainty around regulation frameworks created by stresses in the broader banking system and recent Block-specific detractions related to its revenue streams.
Notice: Function WP_Object_Cache::add was called incorrectly. Cache key must not be an empty string. Please see Debugging in WordPress for more information. (This message was added in version 6.1.0.) in /home/stockstowatch/public_html/wp-includes/functions.php on line 5835
