JPMorgan Predicts Block Inc Will Achieve 'Rule Of 40' By 2026 Despite $70 Million Celebration

Analyst's Perspective: JPMorgan analyst Tien-tsin Huang maintains an Overweight rating on Block Inc. despite mixed third-quarter results, emphasizing that the company is on track to achieve the Rule of 40 by 2026.

Cash App Performance: Cash App showed significant growth with a 24% year-over-year increase in gross profit, driven by higher monetization and a surge in Borrow originations, alongside a rise in monthly active users.

Square's Challenges: Square's growth was slower, with a 9% increase in gross profit, impacted by higher processing costs; however, momentum in field sales and mid-market performance provided some offset.

Future Outlook: Despite a $70 million event affecting profitability, Huang believes Block's ecosystems are accelerating, user metrics are improving, and margins will normalize as temporary challenges subside.