Shares of Block (NYSE:SQ), led by Jack Dorsey, experienced a significant uptick of nearly 20% during early trading on Friday, building upon premarket gains as the payments company issued a robust forecast for first-quarter core earnings that surpassed Wall Street’s expectations.
Trading at $81.39, the stock’s surge added over $8 billion to the company’s market capitalization.
In its pursuit of “profitable growth,” Block has been diligently focusing on cost reduction initiatives, including workforce reductions and downsizing its real estate holdings. The company disclosed its intention to cut 112 jobs in March as part of these efforts.
Brokerage TD Cowen commended the company’s “strong execution and urgency in cost optimization,” noting a continued emphasis on targeted, profitable growth.
Block’s first-quarter adjusted core earnings forecast, ranging between $570 million and $590 million, exceeded analysts’ estimates of $511.8 million, according to LSEG data.
Additionally, the company raised its full-year profit outlook by over $200 million, anticipating 2024 earnings of at least $2.63 billion, reflecting a minimum 15% growth from the previous year.
Following these optimistic projections, at least six brokerages increased their price targets on Block’s shares. Notably, more than 75% of the brokerages covering the stock maintain a “buy” or higher rating.
Block is currently trading at a forward price-to-earnings ratio of 21.
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