Block Stock Tumbles After Downgrade

Year-over-year, SQ is down more than 46%

Deputy Editor
Apr 10, 2023 at 10:19 AM
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Block Inc (NYSE:SQis off by 3.3% to trade at $65.85 this morning, after KBW downgraded the Cash App parent to "market perform" from "outperform" and cut its price target by $15 to $75. 

The analyst noted a number of risks the payment platform is facing, including more competition and potential regulatory scrutiny. According to KBW, these headwinds could keep investors on their toes over the next year.

On the charts, Square stock is holding onto its year-to-date breakeven level, but is more than 46% lower over the last 12 months. Nevertheless, analysts remain bullish towards SQ coming into today; of the 27 covering brokerages, 18 rated the equity a "buy" or better.

What's more, the 12-month consensus target price of $94.35 is a 42.7% premium to current levels, which could mean more price targets could come through if SQ continues to struggle.

Those looking to speculate with options can do so for a bargain at the moment. This is per the security's Schaeffer's Volatility Index (SVI) of 54% that ranks higher than just 2% of annual reading, which implies options traders are pricing in low volatility expectations at the moment.

 

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