- Credit Suisse analyst Timothy Chiodo reiterated an Outperform on Block, Inc SQ. Due to higher interest rates, Chiodo cut the price target to $170 from $180.
- He saw two dominant business models that will "win" over the coming decade within payment acceptance.
- The models will either: 1) be the software platform (and monetize via SaaS, payments, embedded finance, and commerce-enablement services) such as Square; or 2) be a preferred partner in embedding and powering additional ecosystem- and monetization-enhancing services (e.g., payments, issuing, capital, payroll, insurance, fulfillment, tax, lead generation, B2B AP).
- Block is building a two-sided network supported by Cash App and Afterpay, which is a competitive advantage in providing lead generation and conversion versus other merchant acquirers.
- With Block shares trading at 7-times his 2022 gross profit, re-accelerating trends ahead, and a long list of "call options," Chiodo sees a pathway to re-rating.
- Price Action: SQ shares traded higher by 5.69% at $63.73 on the last check Wednesday.
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