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Is Block a Millionaire-Maker?
Block (NYSE: SQ) is at the forefront of the digital payments revolution and has gained 420%, or 21%, compounded annually since its public debut. With digital payments expected to explode, does Block have what it takes to make you a millionaire? Let's dive in and find out. To be a millionaire maker, a stock must deliver incredible results over a long period. For example, if you start with an initial investment of $10,000, which you don't add to over time, these are the returns you would need over various holding periods to reach the coveted million-dollar milestone: As you can see, turning a stock into a million-dollar position requires much patience and hitching your wagon to a company capable of tremendous growth over time. It also takes picking the right companies because only a select few businesses can generate returns that high for multiple decades. Block's growing digital payments presence Block operates a multi-pronged business that serves both businesses and individuals. Its Square point-of-sale system helps small businesses process payments and manage sales, and it was the company's earliest offering. The software eliminated bulky hardware and empowered small businesses to easily accept payments using a smartphone or tablet. The Cash App is Block's financial platform, and it has grown into one of the most popular investing apps among younger generations. Originally a peer-to-peer payments app, the Cash App has bloomed into a full-blown financial services app, allowing users to bank, invest in stocks and Bitcoin, and get loans through Afterpay, the buy now, pay later service Block acquired in 2022. According to the Motley Fool's Generational Investing Tools survey, across 2,000 U.S. adults, the Cash App is the most used investing app, with 38% of all respondents saying they use it. Usage is higher among younger generations, with 54% of millennials and 50% of Gen Z using the Cash App to invest. What's next for Block? Block's Cash App is well-positioned among younger generations, which should help provide a good tailwind for its longer-term growth. However, Block isn't resting on its laurels. CEO Jack Dorsey detailed how Block would streamline operations and become more efficient in reaching the "rule of 40," meaning its gross profit growth and adjusted operating income margin would add up to 40% by 2026. To accomplish this, Block capped its employee count and cut costs to improve the bottom line. The company aims to grow Cash App usage, specifically targeting households earning $150,000 or more by offering high yields on savings accounts. The fintech is also building tools to help customers manage spending and subscriptions, improve their credit, and access Afterpay. It has also reorganized its Square team to focus on integrating generative artificial intelligence (AI) into its product to help sellers grow and manage more tasks to help them scale. Dorsey says he wants the "seller platform to be our superpower." Dorsey also said that the company wants to do a better job of integrating Square and Cash App, saying: "We believe combining the two ecosystems enables us to provide consumer experiences others can't, specifically for commerce." Such efforts could help Block build a closed-loop payments system, providing network effects that could further strengthen its position in the highly competitive payments industry. Image source: Getty Images. Bitcoin will also be a key component of Block's long-term plans. In 2018, the company began allowing customers to buy Bitcoin through its app. Block will continue to bet on the cryptocurrency's future success, investing up to 10% of its gross profit from Bitcoin to purchase more Bitcoin. Dorsey thinks Bitcoin pices can reach $1 million by 2030, and Ark Invest CEO Cathie Wood is even more optimistic, projecting that Bitcoin could reach $3.8 million. Can Block be a millionaire-maker? It's important to remember that reaching one million dollars from an investment requires time, patience, and riding with a stock through thick and thin. For this reason, it's essential to maintain a long-term perspective on your investments by focusing on the next decade and beyond. Block is working to integrate its payment products better so they are synchronized, which could help it build up its closed-loop payments network. Block is well positioned, with the digital payment market projected to grow by 17.4% through 2032. If Bitcoin explodes in value, it could be another significant driver of Block's long-term growth, giving it excellent long-term potential. However, investors should be wise and hold it as part of a diversified portfolio across stocks, rather than rely on any single investment to drive results. After all, your best bet for building lasting long-term wealth is consistently saving and investing over time, and I believe Block can be a good piece of that puzzle. The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now... and Block wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $722,626!* Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than quadrupled the return of S&P 500 since 2002*. Courtney Carlsen has positions in Block. The Motley Fool has positions in and recommends Block. The Motley Fool has a disclosure policy. The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Is Block a Millionaire-Maker? | The Motley Fool
The fintech has delivered 21% annual returns since its IPO in 2015. Can it continue to deliver? Block (SQ 0.15%) is at the forefront of the digital payments revolution and has gained 420%, or 21%, compounded annually since its public debut. With digital payments expected to explode, does Block have what it takes to make you a millionaire? Let's dive in and find out. To be a millionaire maker, a stock must deliver incredible results over a long period. For example, if you start with an initial investment of $10,000, which you don't add to over time, these are the returns you would need over various holding periods to reach the coveted million-dollar milestone: As you can see, turning a stock into a million-dollar position requires much patience and hitching your wagon to a company capable of tremendous growth over time. It also takes picking the right companies because only a select few businesses can generate returns that high for multiple decades. Block operates a multi-pronged business that serves both businesses and individuals. Its Square point-of-sale system helps small businesses process payments and manage sales, and it was the company's earliest offering. The software eliminated bulky hardware and empowered small businesses to easily accept payments using a smartphone or tablet. The Cash App is Block's financial platform, and it has grown into one of the most popular investing apps among younger generations. Originally a peer-to-peer payments app, the Cash App has bloomed into a full-blown financial services app, allowing users to bank, invest in stocks and Bitcoin, and get loans through Afterpay, the buy now, pay later service Block acquired in 2022. According to the Motley Fool's Generational Investing Tools survey, across 2,000 U.S. adults, the Cash App is the most used investing app, with 38% of all respondents saying they use it. Usage is higher among younger generations, with 54% of millennials and 50% of Gen Z using the Cash App to invest. Block's Cash App is well-positioned among younger generations, which should help provide a good tailwind for its longer-term growth. However, Block isn't resting on its laurels. CEO Jack Dorsey detailed how Block would streamline operations and become more efficient in reaching the "rule of 40," meaning its gross profit growth and adjusted operating income margin would add up to 40% by 2026. To accomplish this, Block capped its employee count and cut costs to improve the bottom line. The company aims to grow Cash App usage, specifically targeting households earning $150,000 or more by offering high yields on savings accounts. The fintech is also building tools to help customers manage spending and subscriptions, improve their credit, and access Afterpay. It has also reorganized its Square team to focus on integrating generative artificial intelligence (AI) into its product to help sellers grow and manage more tasks to help them scale. Dorsey says he wants the "seller platform to be our superpower." Dorsey also said that the company wants to do a better job of integrating Square and Cash App, saying: "We believe combining the two ecosystems enables us to provide consumer experiences others can't, specifically for commerce." Such efforts could help Block build a closed-loop payments system, providing network effects that could further strengthen its position in the highly competitive payments industry. Bitcoin will also be a key component of Block's long-term plans. In 2018, the company began allowing customers to buy Bitcoin through its app. Block will continue to bet on the cryptocurrency's future success, investing up to 10% of its gross profit from Bitcoin to purchase more Bitcoin. Dorsey thinks Bitcoin pices can reach $1 million by 2030, and Ark Invest CEO Cathie Wood is even more optimistic, projecting that Bitcoin could reach $3.8 million. It's important to remember that reaching one million dollars from an investment requires time, patience, and riding with a stock through thick and thin. For this reason, it's essential to maintain a long-term perspective on your investments by focusing on the next decade and beyond. Block is working to integrate its payment products better so they are synchronized, which could help it build up its closed-loop payments network. Block is well positioned, with the digital payment market projected to grow by 17.4% through 2032. If Bitcoin explodes in value, it could be another significant driver of Block's long-term growth, giving it excellent long-term potential. However, investors should be wise and hold it as part of a diversified portfolio across stocks, rather than rely on any single investment to drive results. After all, your best bet for building lasting long-term wealth is consistently saving and investing over time, and I believe Block can be a good piece of that puzzle.
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An analysis of Block's (formerly Square) potential as a high-growth investment in the financial technology industry, examining its business model, recent performance, and future prospects.
Block, formerly known as Square, has emerged as a significant player in the financial technology sector. Founded by Twitter co-founder Jack Dorsey, the company has shown remarkable growth and innovation since its inception. Block's ecosystem encompasses a range of products and services, including its popular Cash App and Square payment processing system, positioning it as a potential millionaire-maker stock for investors
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.One of Block's key strengths lies in its diversified business model. The company operates two primary segments: Square, which caters to merchants, and Cash App, which serves individual consumers. This dual approach has allowed Block to tap into multiple revenue sources and expand its market reach
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.Cash App, Block's peer-to-peer payment platform, has been a significant driver of the company's success. The app has seen exponential user growth, with features extending beyond simple money transfers to include investing, cryptocurrency trading, and banking services. This comprehensive offering has helped Cash App become a financial super-app, attracting millions of users and generating substantial revenue
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.While Cash App has been in the spotlight, Block's Square segment continues to innovate and expand its services for merchants. From point-of-sale systems to e-commerce solutions and business loans, Square provides a comprehensive suite of tools for businesses of all sizes. This ongoing innovation helps Block maintain its competitive edge in the merchant services market
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.Block has been at the forefront of cryptocurrency adoption in mainstream finance. The company's early embrace of Bitcoin, both through Cash App and its corporate treasury, positions it well for the potential growth of digital currencies. This forward-thinking approach could prove to be a significant advantage as the financial landscape continues to evolve
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Despite its strong position, Block faces intense competition in the fintech space. Companies like PayPal, Stripe, and traditional banks are all vying for market share. Additionally, regulatory challenges and economic uncertainties could impact Block's growth trajectory. Investors should be aware of these risks when considering Block as a potential millionaire-maker stock
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.Block's financial performance has been impressive, with consistent revenue growth over the years. However, the company's stock has experienced volatility, influenced by broader market trends and sector-specific factors. While past performance doesn't guarantee future results, Block's innovative approach and expanding ecosystem suggest potential for continued growth
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