Time To Buy XYZ Stock?

Block stock (NYSE: XYZ) has dropped approximately 14% in a week following downbeat third-quarter results, with both revenue and earnings missing analyst estimates. The company attributed this slowdown to a processing partner change and an increase in lower-margin hardware sales.

Despite the recent drop, Block stock should be on your radar. It is currently trading within a historical support range ($62.18 – $68.72). Over the past decade, the stock has rebounded significantly from this level, attracting buying interest 13 times and subsequently achieving an average peak return of 46.7%.

Furthermore, the latest results weren’t entirely negative: Block reported a gross profit of $2.66 billion, an 18% increase year-over-year and above the $2.60 billion consensus estimate. The company also demonstrated confidence by raising its full-year gross profit guidance for 2025 to $10.24 billion, up from its previous projection of $10.16 billion.

But is the price action sufficient on its own? It’s definitely advantageous if the fundamentals are strong. For XYZ, read Buy or Sell XYZ Stock to determine how compelling this buying opportunity may be.

XYZ stock can be volatile. A well-thought-out asset allocation doesn’t. Trefis’ wealth management partner, located near Boston, combines strategy and discipline to mitigate market volatility.

Here are some swift data points for Block that should assist in your decision-making:

• Revenue Growth: 0.5% LTM and a 12.6% average over the last 3 years.
• Cash Generation: Nearly 7.6% free cash flow margin and 9.6% operating margin LTM.
• Recent Revenue Shocks: The minimum annual revenue growth over the last 3 years for XYZ was 1.4%.
• Valuation: XYZ stock has a PE ratio of 12.7

For a brief background, Block provides payment solutions with both hardware and software for card acceptance, reporting, analytics, and next-day settlement, including Magstripe readers, EMV/contactless devices, and iPad-based point-of-sale systems.

What Is Stock-Specific Risk If The Market Crashes?

XYZ is not shielded from significant declines. It dropped around 49% during the 2018 correction, 56% amid the Covid pandemic, and experienced its steepest decline with an 86% drop during the inflation shock. Despite the positives, these figures indicate that the stock can endure considerable losses when the market declines. Strong fundamentals do not guarantee immunity from downturns during periods of increased volatility.

However, the risk extends beyond major market crashes. Stocks can decline even when markets are performing well – consider events like earnings reports, business updates, or changes in outlook. Read XYZ Dip Buyer Analyses to understand how the stock has bounced back from sharp decreases historically.

The Trefis High Quality (HQ) Portfolio, consisting of 30 stocks, has consistently outperformed its benchmark that encompasses all three – the S&P 500, S&P mid-cap, and Russell 2000 indices. What accounts for this advantage? Collectively, HQ Portfolio stocks have yielded superior returns with lower risk compared to the benchmark index; resulting in a smoother investment experience, as shown in HQ Portfolio performance metrics.