Goldman Sachs on Block Inc. (XYZ.US): Key Takeaways from Roadshow Meetings
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Following recent roadshow meetings, Goldman Sachs reiterated its Buy rating on Block Inc. (XYZ.US) with a target price of USD 100, highlighting management's confident tone regarding accelerating growth and disciplined capital allocation for 2026.
Management projections indicate a notable acceleration across core platforms, with Cash App revenue expected to grow by over 20% and Square revenue by more than 15% in 2026. Gross margins are projected to expand by 200 basis points to 45%, driven by scale efficiencies and cost optimization initiatives. Furthermore, the adjusted EBITDA margin target remains steady at 25%.
During the roadshow, leadership appeared unperturbed by competitive threats such as Apple Pay, citing high user stickiness within the Cash App ecosystem. Regulatory risks were characterized as manageable, supported by proactive engagement with oversight bodies. Capital allocation continues to prioritize shareholder returns, evidenced by a planned USD 1 billion share repurchase program for 2026.
Goldman Sachs views these targets as credible based on management's historical execution. The firm notes that workforce optimizations have positioned Block to accelerate fully burdened gross profit growth into 2027. Incremental margins have already begun to improve, suggesting that current consensus operating profit estimates may possess mid-single-digit to low-teens upside potential, reinforcing the bullish outlook.
Key exhibits
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