Block announced that the CEO of its Square business, Alyssa Henry, plans to depart the company in the coming weeks after about 9 years at the company.
Block CEO Jack Dorsey, the former Twitter leader, plans to lead the Square fintech business.
Analysts at Wedbush weren’t surprised by the change.
“Given SQ’s recent underperformance relative to peer, FISV’s owned, Clover, this leadership transition shouldn’t be surprising, with ongoing strategic assessment of SQ’s merchant-facing business long overdue,” the analysts wrote.
Such an assessment should include, “the logic driving SQ moving upstream, away from its core macro-cap SMB base, towards mid-size merchants, where the competitive environment is likely more intense, impacting pricing.”
They continued, “We believe management will take a closer look at multiple key performance indicators, including ‘time to payback.’
International markets are also a point of interest moving forward, the analysts noted.
“As per the last quarter, management pointed to continued macro-related headwinds, which were more pronounced in Australia in the second quarter, albeit with overall growth ex [buy now pay later] continuing to be at a much faster rate of growth than the overall base of the business at 35% year-over-year growth for those international markets,” the analysts said.
Shares of the company fell 3% Tuesday afternoon to $49.69.
“Bottom line, we remain on the sidelines, pending improving growth or non-GAAP profitability,” the analysts added.
Contact Andrew Kessel at andrew.kessel@proactiveinvestors.com
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