Wells Fargo’s Best Growth Stocks: 28 Stocks With The Highest Consensus EPS Growth Estimates

3. Block, Inc. (NYSE:SQ)

Consensus Long-Term EPS Growth Estimate: 36%

Number of Hedge Fund Holders: 59

Block, Inc. (NYSE:SQ) is a financial technology company that provides payment software and products. Its products make it a new-age financial technology firm which is one of few that are jostling to take customers away from well-entrenched rivals such as Visa and Mastercard. Consequently, Block, Inc. (NYSE:SQ)’s hypothesis depends on the firm’s ability to target new markets, retain and grow customers, and capture share away from incumbents. The firm’s reliance on transactions also means that it depends on the broader economic health for its performance. Block, Inc. (NYSE:SQ)’s goal of becoming a Rule of 40 firm by FY2026 end is another key driver of investor sentiment since margins play a key role for software firms. Some strategic initiatives that the firm is undertaking to expand and grow customers include partnering up with restaurant and beauty companies.

Columbia Threadneedle Investments mentioned Block, Inc. (NYSE:SQ) in its Q2 2024 investor letter. Here is what the fund said:

“Block, Inc. (NYSE:SQ) – It is hard to pinpoint why the stock moved lower in the last two months of the quarter, but the most likely reason seems to be simply that investor sentiment on the stock remains generally quite negative for the near term. Investors seem to be taking recent comments from Jack Dorsey (CEO of Square, who also heads Square’s parent company, Block) to mean that a lot still needs to be fixed, rather than the perspective that Mr. Dorsey is being honest and straightforward that things weren’t working and that Square now has a clear plan and a lot of urgency behind its initiatives. The reinvigoration of Square appears very real, with a bold vision to become a generational technology company. The organization is aligned on making Square and Cash App a vertically integrated commerce platform for both sellers and consumers. For Square, this means achieving a growth rate similar to its early days with much better technology while, for Cash App, success is defined as becoming the leading primary bank for those making less than $150,000 per year, along with significant success combining the two ecosystems. The experimentation and innovation culture is back with buy-in across the organization, with a key focus on engineering discipline and exceptional products. This discipline had been lost and is now coming back and should create much better product experiences that are customer-problem focused and enable the company to regain its prior pace of market share gains.”