Square parent Block is the IBD Stock of the Day as the digital payments company climbs above its 50-day moving average, forging an early entry point. Fourth quarter earnings for Block stock are due Feb. 20.
On the stock market today, Square stock fell 2.3% to close at 90.82.
Block, formerly called Square, changed its ticker symbol to XYZ from SQ on Jan. 21.
In late 2021, Square changed its name to Block. The move reflected the company's commitment to blockchain technology, which underpins cryptocurrency.
Also, Block stock has gained 9% in 2025. Reclaiming the 50-day line is a bullish signal.
In its core businesses, Square has built a two-sided digital payments ecosystem, with products designed for both merchant sellers and consumer buyers. The Square Cash App helps individuals manage money, buy stocks and cryptocurrency, and more.
Block aims to bridge the Cash App and merchant ecosystems with consumer financing services from Afterpay. Block acquired Afterpay in early 2022. Afterpay offers consumers "buy now, pay later" (BNPL) installment payment services.
Shares hit a 52-week high of 99.26 on Dec. 5 amid big gains for cryptocurrency bitcoin. Bitcoin surged after the election of President Donald Trump in early November. But cryptocurrency prices have been volatile.
Block Stock: Options Trade
Block has aimed to build infrastructure that enables bitcoin-based commerce on its merchant platform. In addition, Square created a new business line to help developers build financial services products focused on Bitcoin.
With Block earnings due on Feb. 20, investors may want to be cautious ahead of the report. One strategy around earnings would be to use call options. That approach would let investors cap their possible loss while still letting them participate in any post-earnings upside.
Rival PayPal Holdings reports Q4 earnings on Feb. 4. Affirm Holdings reports on Feb. 6.
For Block's Q4, Wall Street analysts model adjusted EPS of 88 cents, up 95%, with gross revenue growing 9% to $6.29 billion.
After the recent outperformance, "Block could have some near-term choppiness with potential for a U.S. GPV (gross payment volume) deceleration," said Jefferies analyst Trevor Williams in a report. "But we think messaging around the fiscal year outlook will be enough to keep the 2025 bull case very much alive."
Block Stock: Key Metrics In 2025
Wall Street analysts focus on other key financial metrics for Square stock.
For 2025, Wall Street has projected gross profit of $11.84 billion, up 15%, and adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) of $3.686 billion, up 23%.
Block's merchant business has been struggling.
For merchants, Square makes credit-card readers that plug into mobile devices. Its Square Capital division provides loans to sellers.
With roots in serving such micromerchants as food trucks and farm-stand vendors, Square has moved "upmarket," targeting larger businesses. In addition to selling credit-card readers, Square provides software for point-of-sale and back offices in order to manage inventory and other tasks.
In addition, analysts are focused on Cash App banking services as a growth engine.
Also, some investors fear potential weakness in Square's point-of-sale business amid growing competitive pressures from Toast in restaurants and Fiserv's Clover unit generally.
Block Stock: Technical Ratings
If a U.S. recession hits, one question is how resistant Square would be to a business downturn. The relatively low income level of Square's customer base is one factor for investors to consider if the U.S. economy weakens, analysts say.
Square's Relative Strength Rating stands at 91 out of a best-possible 99, according to IBD Stock Checkup. The best stocks tend to have an 80 or better RS Rating.
Block stock holds an IBD Composite Rating of 97 out of a best-possible 99. IBD's Composite Rating combines five separate proprietary ratings into one easy-to-use rating. The best growth stocks have a Composite Rating of 90 or better.
XYZ stock, meanwhile, holds an Accumulation/Distribution Rating of B-. The rating runs from a best-possible A+ to a worst-possible E. The rating analyzes price and volume changes in a stock over the past 13 weeks of trading.
Follow Reinhardt Krause on Twitter @reinhardtk_tech for updates on artificial intelligence, cybersecurity and cloud computing.
