Why Block (ASX: XYZ) is up ~7% in a weak mid-term impacted market
Block (ASX: XYZ) the fintech group behind Square and Cash App, is rallying following a stronger-than-expected Q3 2026 result, with shares jumping more than 6% in Australian trading. The company delivered a broad-based earnings beat, with revenue rising to US$6.72bn, ahead of consensus at US$6.58bn, while gross profit surged 22% to US$3.2bn, also exceeding expectations.
- Adjusted earnings per share of US$1.13–1.19 comfortably beat forecasts of around US$0.96–1.03, marking Block’s sixth consecutive quarterly earnings beat.
Importantly, management raised its full-year gross profit outlook to US$12.6bn and guided to Q4 earnings of US$1.15 per share, reinforcing confidence in its improving profitability. AI-driven efficiencies are helping reduce costs and support margins, while continued growth across Square and Cash App underpins the longer-term opportunity.
Although a potential US Department of Justice settlement remains an overhang, investors are clearly focusing on accelerating earnings and improving operating leverage.
The result reinforces the appeal of Block’s business model, with stronger growth and cost discipline providing a pathway to further earnings upgrades.
MM is bullish towards XYZ ~$117 initially targeting the $145-150 area.
