Block shares plummeted more than 20% on their worst day in months after a brutal quarterly report and analyst downgrades centered on stagnant Cash App user growth. The financial services company’s earnings miss, including revenue, gross profit, and payment volume, prompted multiple firms to downgrade the stock.
Analysts pointed to concerns over slow user adoption, muted consumer demand, and a soft macro environment affecting monetization. Monthly actives remained flat at 57 million despite new features like Afterpay on the Cash Card. Despite this, inflows rose just 8%, failing to meet expectations.
CEO Jack Dorsey attributed the miss to a lack of focus on the network and density, which is essential for growth. He highlighted plans to deepen engagement with customers through banking services and Borrow. However, the company’s full-year guidance was slashed due to macro uncertainty and weaker consumer spending.
The only positive note came from CEO Jack Dorsey’s comments about the need to continuously grow the network and improve peer-to-peer lending, a key component of Block’s turnaround plan. Despite this, the market remains skeptical, with some maintaining optimism while others downgraded the stock to “hold” or “market perform”.
In contrast, rival Venmo is showing signs of momentum, with parent company PayPal reporting a 20% revenue jump for the app in Q1 driven by increased adoption and monetization per user. As both companies vie for consumer wallet dominance, Block shares continue to struggle, while Venmo appears to be gaining ground.
Source: https://www.cnbc.com/2025/05/02/block-stock-cash-app-downgrades.html