Citigroup has placed Block (SQ, Financial) on a 30-day negative catalyst watch list, even as it maintains a "Buy" rating with a target price of $90. Analysts at Citigroup suggest that Block's fiscal year 2025 guidance, expected in the upcoming third-quarter earnings report, might indicate increased spending on merchant and user acquisition. This is attributed to Block meeting its "Rule of 40" target—where the sum of growth rate and profit margin reaches 40%—ahead of schedule. Such actions could put the fiscal year 2025 consensus expectations at risk.
Block is set to release its third-quarter earnings on November 7. Market forecasts project a revenue of $6.25 billion for Q3, marking an 11% year-over-year increase, and an earnings per share (EPS) of $0.88, a 60% rise from the previous year.
As of last Friday's close, Block shares rose by 1.33% to $74.66. However, the stock has fallen 3% year-to-date.
