If You'd Invested $500 in Block (XYZ) 5 Years Ago, Here's How Much You'd Have Today
Key Points
Investors might not be pleased with Block reporting slower growth these days than during the pandemic years.
The business is much larger today, and it’s generating sizable profits.
- 10 stocks we like better than Block ›
Investors in Block (NYSE: XYZ) have been on a wild ride. This was once a top-performing stock, with shares soaring 2,430% in the five-year period leading up to the all-time record. After the market tanked in 2022, this stock has had a difficult time recovering.
If you'd invested $500 in Block shares five years ago, here's how much you'd have today.
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Image source: Block.
Block stock's return is disappointing
Block shares are down 56% in five years (as of Oct. 9), turning $500 into a disappointing $220 today. The company performed exceptionally well during the COVID-19 pandemic, with gross profit up 45% in 2020 and 62% in 2021, as digital payments adoption was robust.
It's easy to be optimistic about the business
Compared to five years ago, the business is much bigger today. The Square segment, which generated over $1 billion in second-quarter (ended June 30) gross profit, counts more than 4 million merchants using its platform. Cash App has 57 million monthly active users, and it reported $1.5 billion of gross profit in the second quarter.
Even better, Block is expected to generate $2 billion in non-GAAP operating income in 2025. In 2020, the company posted an operating loss of $19 million.
Despite the improved fundamental position, investors might not be pleased that growth is slower than in years past. Competition also remains fierce.
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Neil Patel has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Block. The Motley Fool has a disclosure policy.
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