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Block's (SQ) Expanding Partner Base Boosts BNPL Offerings

Block SQ is leaving no stone unturned to strengthen its “Buy Now, Pay Later” (BNPL) platform, Afterpay, on the back of strategic partnerships.

This is evident from the recent collaboration of Afterpay with several brands including Curology, Helzberg Diamonds, Journeys, Rawlings Sporting Goods, and Zenni Optical. This partnership is focused at boosting the shopping experience for the U.S. customers.

U.S. shoppers can pay in instalments when they shop for the aforementioned brands, thereby making shopping more convenient and affordable as high prices continue to affect consumer spending.

Block is expected to gain solid traction across the customers in the United States on the back of this latest move.

Block, Inc. Price and Consensus

Block, Inc. Price and Consensus
Block, Inc. Price and Consensus

Block, Inc. price-consensus-chart | Block, Inc. Quote

Expanding Partner Base Aids Prospects

Per a Fortune Business Insights report, the global BNPL market is expected to hit $37.19 billion in 2024 and reach $167.58 billion by 2032, witnessing a CAGR of 20.7% between 2024 and 2032. Block is well-poised to capitalize on this growth opportunity on the back of its expanding Afterpay partner base.

Block’s Afterpay recently collaborated with various merchants, including Diane von Furstenberg, Diggs, For Eyes and Kendra Scott, among others, to offer installment payments for purchases, allowing younger consumers to spend within their means.

Afterpay’s partnership with the e-commerce technology company Rokt in a bid to boost the online shopping experience for customers remains noteworthy. This partnership will enable Afterpay and its retail partners to provide relevant advertising experiences to targeted customers during the checkout process using Rokt's e-commerce solution.

These endeavors will continue aiding Afterpay’s growth trajectory, which in turn will likely contribute to the overall financial performance of Block in the days ahead.

For 2024, Block raised its guidance for gross profit from $8.65 billion to $8.78 billion, indicating growth of 17% from 2023.

The Zacks Consensus Estimate for 2024 revenues is pegged at $25.22 billion, indicating 15.1% year-over-year growth.

The consensus mark for 2024 earnings is pegged at $3.11 per share, indicating a 72.8% rise from the year-ago figure. The figure has been revised upward by 0.6% in the past 30 days.

Stiff Competition Hurts Block

This Zacks Rank #3 (Hold) company faces stiff competition against players like PayPal PYPL, Mastercard MA and Affirm AFRM, which are also making concerted efforts to strengthen their foothold in the BNPL market. Increasing competitive pressure remains a concern for the company.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Block’s shares have lost 20% in the year-to-date period, underperforming the Zacks Business Services sector and Mastercard’s growth of 4.7% and 5.8%, respectively. Affirm and PayPal have declined 37.9% and 3% in the same period, respectively.

PayPal’s robust BNPL offerings have made it one of the biggest BNPL players in the global market. Its acquisition of Paidy — a Japan-based BNPL solution provider — remains noteworthy.

Mastercard has strengthened its position in the BNPL market with the growing momentum of its BNPL program, Mastercard Installments. This program meets the needs of lenders, merchants and consumers by offering flexible, digital-first payment options.

Affirm, on the other hand, is benefiting from its robust BNPL portfolio. It recently introduced Pay in 2 and Pay in 30, two new payment options, offering greater flexibility and affordability for consumers using its app, without late fees or hidden charges.

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