Block Inc (NYSE:SQ)’s merchant-facing platform’s near-term growth prospects will likely be negatively impacted by Bill.com’s 2023 year-end financial results, its metrics, full-year 2024 guidance and cautious commentary, according to Wedbush Securities analysts.
In an update to clients, the analysts noted that they believe BILL’s strategy of selling financial automation software to small-to-medium-sized (SMBs), including solutions for managing financial workflows, including payables, receivables, and spend and expense management is comparable to Block’s model of monetizing its merchant eco-system.
"Trends pointing to payment volume stabilization are encouraging, but BILL expects continued TPV (total payment volume) headwinds through calendar year 2024, given higher interest rates, tighter credit conditions, and an uncertain macro environment," the analysts wrote.
They added that near-term macro distractions will continue to impact SMBs, pointing to further moderation in spend on a per-customer basis.
Analysts at Wedbush have a ‘Neutral’ rating and a 12-month target price of $70 on Block’s stock.
Shares of Block Inc (NYSE:SQ), formerly known as Square, rose 0.6% to $57.27 in late-afternoon trading on Monday but have fallen 12% year to date.
Contact Sean at sean@proactiveinvestors.com