10 Best Affordable Tech Stocks to Buy According to Analysts

4) Block, Inc. (NYSE:SQ)

Forward P/E as of 23 August: 18.87x

Upside Potential: 37.70%

Expected EPS Growth This Year: 100%

Block, Inc. (NYSE:SQ) operates as a financial services and digital payments company. It develops a payments platform aimed at small and medium businesses, allowing them to accept credit card payments and use tablet computers as payment registers.

Both Cash App’s growth and the direction of its merchant business are key to the company’s stock. The Square Cash App supports individuals in managing their money, buying stocks and cryptocurrency, and more. Therefore, new banking services could be an important driver for Cash App’s growth. Block, Inc. (NYSE:SQ)’s adjusted EBITDA margin went up from 17% in 2020 to 24% in 2023. The company anticipates this to touch 33% this year. Cost reduction is expected to act as an enabler.

The company’s interconnectedness of the ecosystem which they have manufactured should continue to act as a tailwind. Even though switching from one POS system to another might be simple, Block, Inc. (NYSE:SQ)’s fully integrated financial services software, which consists of credit card processing, payroll, and other offerings, makes its customers dependent on the firm.

Also, Block, Inc. (NYSE:SQ) has a significant bank of data, which competitors find hard to replicate.  Given Block, Inc. (NYSE:SQ)’s customer (Cash App) and merchant (Square) side offerings, it can capitalize on its market through a double-ended collection of data, providing an opportunity for innovation.

In the second quarter of 2024, the number of hedge funds with stakes in Block, Inc. (NYSE:SQ) stood at 59, according to Insider Monkey’s database.

Analysts at Royal Bank of Canada reissued an “Outperform” rating on the shares of the company. They gave a price target of $88.00 on 2^nd August. Baron Funds, an investment management company, released its second-quarter 2024 investor letter. Here is what the fund said:

“Block, Inc. (NYSE:SQ) provides point-of-sale technology to small businesses and operates the Cash App ecosystem of financial services for individuals. Shares gave back gains from earlier this year despite reporting strong quarterly results and raising full-year guidance. In the first quarter, gross profit grew 22% and EBITDA grew 91%, both exceeding Street expectations. Given the strong start to the year, second-quarter guidance of 16% to 17% gross profit growth may have disappointed some investors. Management remains committed to a “Rule of 40” investment framework in 2026 with at least mid-teens gross profit growth and a mid-20% operating margin. We continue to own the stock due to Block’s long runway for growth, durable competitive advantages, and innovative product offering.”