Analysts remain mostly bullish on Block, with 29 of 43 brokerages having a Buy or Strong Buy rating. Another 11 rate the stock at Hold. At a recent price of $59.00 a share, the upside potential based on a median price target of $100.00 is 69.5%. At the high price of $210.00, the upside potential is 256%.
Third-quarter revenue is forecast at $4.47 billion, up 1.5% sequentially and by 16.4% year over year. Adjusted EPS are expected to come in at $0.23, up 27.5% sequentially but down 37.8% year over year. For the full 2022 fiscal year, estimates call for EPS of $0.85, down 50%, on sales of $17.54 billion, down 0.7%.
Square stock trades at about 69.1 times expected 2022 EPS, 38.3 times estimated 2023 earnings of $1.54 and 23.9 times estimated 2024 earnings of $2.46 per share. The stock’s 52-week trading range is $51.45 to $255.95. Square does not pay a dividend. The total shareholder return for the past year was negative 76.9%.
Carvana
Used car retailer Carvana Co. (NYSE: CVNA) has had a tough year. The stock has dropped 95% of its value over the past 12 months and posted a 52-week low late last month. Carvana got some welcome news on Tuesday when analyst Rajat Gupta at J.P. Morgan raised his rating on the stock from Underweight to Neutral and pasted on a $20 price target. That’s not much good news, but it is the best news Carvana has gotten since CarMax reported quarterly results in September that cast a chill over the entire auto dealership business.
Analysts have adopted a wait-and-see position on the shares. Of 27 brokerages covering the company, 16 have a Hold rating and 10 have a Buy or Strong Buy rating. At a share price of around $15.30, the upside potential based on a median price target of $42.00 is nearly 175%. At the high price of $100.00, the upside potential is more than 550%.
Third-quarter revenue is forecast at $2.75 billion, down 3.5% sequentially but 7.8% higher year over year. Carvana is expected to post an adjusted loss per share of $1.97, better than the $2.35 loss per share in the prior quarter but much worse than the year-ago per-share loss of $0.38. For the full 2022 fiscal year, estimates call for an adjusted loss per share of $8.93, much worse than the year-ago loss of $1.63 per share. Full-year sales are forecast at $14.95 billion, up 16.7% year over year.
Carvana is not expected to post a profit in 2022, 2023 or 2024. The company’s enterprise value to sales multiple for 2022 is 0.6, dropping to 0.5 in 2023 and 0.4 in 2024. The stock’s 52-week range is $12.90 to $307.11. The company does not pay a dividend. The total shareholder return for the past year was negative 94.9%.
Coinbase
Like Carvana, Coinbase Global Inc.’s (NASDAQ: COIN) 52-week (and post-IPO) high will begin dropping next week. But the company’s record of missing sales estimates and earnings estimates more often than not does not seem to be in jeopardy. In late September, a crypto patent troll filed a $350 million infringement suit against Coinbase. On the plus side, the Netherlands recently approved the company’s application to become the country’s first major crypto exchange. The good news needs to come in a flood, though, not a trickle. Shares have lost more than 80% in the past 12 months.
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