By Senad Karaahmetovic
Back in June 2021, shares of Block Inc (NYSE:SQ), then known as Square, were trading comfortably above $200 per share.
It was back then that a Mizuho analyst told the firm’s clients that “buying Square now is like buying JPMorgan in 1871.” Fast forward to today, he cut the rating on SQ to Neutral from Buy.
“After years of rightfully being deemed the most innovative name in payments, we believe user fatigue, plateauing inflows, loss of the best-of-breed POS status, and BNPL misexecution are blocking SQ's growth,” he told clients in a note today.
While the analyst acknowledges that SQ still has “enormous potential,” he also admits that this potential is not realized.
“BNPL estimates continue to come down & projects like Bitcoin - which accounts for <5% of GP - seem to disproportionately preoccupy management's attention,” he added.
The price target is cut by over 50% to $57 as the analyst claims SQ “no longer merits a premium to the US payments group.”
Block shares are down 1.5% today.