Shares of Block Inc (NYSE:XYZ) slipped in early trading this morning after climbing last week on a blowout first-quarter report.
The company delivered a strong beat-and-raise quarter, amid macro noise and investor skepticism around the recent layoffs, according to BofA Securities.
The Block Analyst: BofA analysts maintained a Buy rating and price target of $100.
The Block Thesis: The first quarter marked "a constructive start to the year," with the company reporting higher-than-expected gross profits, operating income, and earnings, "with upside driven by improved execution and disciplined cost control rather than one-time items," analysts wrote in the note.
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Block reported gross profit, adjusted operating income and adjusted earnings of $2.90 billion, $727 million and 86 cents per share, versus Street expectations of $2.80 billion, $712 million and 68 cents per share, respectively, they noted.
"Engagement trends remained resilient, with Cash App monetization better than expected, while Asterpay growth accelerated in the quarter," the analysts wrote.
Despite ongoing macro uncertainty, the company's quarterly results provide "early evidence that the earnings profile is inflecting," they stated.
Management's upward revision of their full-year guidance underlines their growing confidence in Block's operating leverage and margin expansion, with AI-enabled efficiencies across the platform, they further added.
XYZ Price Action: Shares of Block had declined by 1.72% to $73.56 at the time of publication on Monday.
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