Block, Inc. (NYSE:XYZ) is one of the Best Long Term Growth Stocks to Buy Now. On October 3, Morgan Stanley analyst James Faucette maintained their neutral stance on the company’s stock, giving a “Hold” rating. The analyst’s rating is backed by a combination of factors affecting Block, Inc. (NYSE:XYZ)’s Cash App business. There is optimism regarding the potential for gross profit acceleration in H2 of the year, mainly with the expansion of Borrow and Cash Card spending. However, the overall investor sentiment is cautious. This caution is because of the uncertainties in the macroeconomic environment.
There is also a renewed focus on profitability over growth, with investors carefully monitoring loss rates and operational expenses. Amidst the challenges, there is some confidence in Block, Inc. (NYSE:XYZ)’s ability to manage loss rates, added the analyst. In Q2 2025, Cash App gross profit rose 16% YoY, thanks to the growth throughout Cash App Borrow, Cash App Card, and BNPL. In Q2 2025, investments in the lending products continued, including growing Borrow, considering the healthy unit economics and returns.
Sands Capital, an investment management company, released its Q1 2025 investor letter. Here is what the fund said:
“Block, Inc. (NYSE:XYZ) is a digital financial services pioneer and enabler of financial inclusion. The business disappointed investors with lighter-than-expected first-quarter 2025 guidance. We are reassessing Block’s fit with our criteria following significant poor execution in Square, which allowed competitors to establish positions with point-of-sale. While Block has since improved its product and go-to-market strategy, it’s unclear if these changes will regain momentum or if they arrived too late. Cash App remains stronger but faces challenges transitioning from peer-to-peer to full-service banking. Product cadence has slowed, possibly due to execution, regulatory focus, or business maturity. While Block has restructured operations and has significant potential growth drivers (e.g., AfterPay on the Cash Card, Cash App Borrow), we’re carefully evaluating whether the business is at a turning point.”
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Disclosure: None. This article is originally published at Insider Monkey.
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