10 Best SaaS Stocks to Invest In

7) Block, Inc. (NYSE:SQ)

Number of Hedge Fund Holders: 64

Block, Inc. (NYSE:SQ) operates as a Saas business via its suite of software solutions which aid businesses manage various aspects of their operations. Monness, Crespi, Hardt upgraded the company’s shares from “Neutral” to “Buy,” offering a price target of $115.00. The upgrade stems from the strong growth in Cash App’s monetization, user base, and inflows, which are well-placed for continued expansion in 2025. This optimism is also aided by the progress made on Cash App Pay/Card functionalities and the unification of apps. In Q3 2024, Block, Inc. (NYSE:SQ) generated a gross profit of $932 million, up 16% YoY and Cash App generated a gross profit of $1.31 billion, up 21% YoY.

Elsewhere, Raymond James analyst, John Davison, upgraded Block, Inc. (NYSE:SQ)’s stock to “Outperform” from “Market perform” on January 3. This upgrade came off the back of analysts’ views about merchant GPV, which is expected to improve in 2025. The analyst has a high degree of confidence that Seller GPV will accelerate into the double-digits in 2025. Furthermore, the merchant business can get a boost from new distribution deals, international expansion, and product innovation, says Davison.

The integration of Cash App and Square ecosystems demonstrates a strong opportunity for Block, Inc. (NYSE:SQ) to create a seamless financial platform for consumers and merchants. This integration is expected to result in higher user engagement, increased transaction volumes, and improved monetization rates. With businesses seeking out cloud-based software to manage payments, sales, customer relationships, inventory, and other operations, Block, Inc. (NYSE:SQ)’s suite of SaaS products will become attractive.