Shares of Block XYZ have gained 24.9% in the past three months, outperforming the industry’s 0.4% upside.
This fintech company offers financial and marketing services through a commerce ecosystem that helps sellers start, run and grow their businesses. It operates through two reportable segments, Square and Cash App. Square provides point-of-sale tools that help sellers accept payments and manage operations. Cash App provides consumer financial products focused on peer-to-peer payments and money management.
Image Source: Zacks Investment Research
Let us decipher the possible factors behind the surge in the stock price of this Zacks Rank #3 (Hold) company.
Block remains focused on generating profit, as evidenced by its first-quarter 2026 gross profit growth of 27% year over year to $2.91 billion. Management raised full-year 2026 gross profit guidance to $12.33 billion, indicating 19% year-over-year growth. The company also plans to increase its go-to-market spending in high return on investment (ROI) areas, while still targeting mid-teens gross profit growth exiting 2026, which supports a multi-year growth path with expanding profitability.
Cash App stands as a strong pillar of Block's ecosystem, prioritizing customer relationships through innovative financial tools and commerce solutions. In the first quarter of 2026, Cash App gross profit grew 38% year over year to $1.91 billion, driven by growth in Commerce Enablement and Financial Solutions. Monthly transacting actives were 59 million in March 2026, up 4% year over year, while primary banking actives rose 18% to 9.7 million. Management continues to expect low single-digit actives growth in 2026 and year-over-year growth in primary banking actives.
Square gross payment volume (GPV) is a critical performance metric for Block’s seller-focused segment, reflecting the volume of commerce processed for merchants using Square’s hardware and software payment platforms. In the first quarter of 2026, Square gross profit increased 9% year over year to $982 million, while Square GPV grew 13% to $61.2 billion. Management expects GPV growth to increase in 2026 versus 2025, with new volume added helping offset tougher year-over-year comparisons and foreign exchange headwinds, particularly in the second half of 2026.
Embedded credit remains a major monetization lever, but the company is pairing growth with underwriting and broader product attachment. In the first quarter of 2026, consumer lending origination volume grew 82% year over year to $17.6 billion, driven by Cash App Borrow, with underwriting in line with expectations.
The company is expanding Buy Now Pay Later (“BNPL”) capabilities across the Cash App ecosystem through new Afterpay integrations, while lending growth continues to be driven by strong adoption of Cash App Borrow and improving underwriting performance. It also began rolling out Cash App Score to make underwriting signals more visible and actionable for customers. Management expects Borrow growth to normalize in the second quarter of 2026 as it laps exceptional growth, but it continues to view embedded lending and BNPL as key long-term drivers of Cash App monetization.
Given the above-mentioned factors, we believe the rising trend in the stock is expected to continue in the near term.
Key Risks for XYZ
The company operates in crowded markets across merchant acquiring, POS software, consumer wallets and BNPL, where pricing and feature parity can shift quickly. Square’s seller base includes many smaller businesses, which can see faster volume swings when demand softens or operating costs rise.
Stocks to Consider
Some better-ranked stocks from the Zacks Internet-Software sector are BILL Holdings BILL and Paycom Software PAYC, each sporting a Zacks Rank of #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for BILL’s 2026 EPS per share is pegged at $2.59, which indicates year-over-year growth of 17.19%.
The Zacks Consensus Estimate for PAYC’s full-year EPS per share is pinned at $10.63, which suggests an increase of 15.04% from the year-ago period.
Zacks' Research Chief Names "Stock Most Likely to Double"
Our team of experts has just released the 5 stocks with the greatest probability of gaining +100% or more in the coming months. Of those 5, Director of Research Sheraz Mian highlights the one stock set to climb highest.
This top pick is a little-known satellite-based communications firm. Space is projected to become a trillion dollar industry, and this company's customer base is growing fast. Analysts have forecasted a major revenue breakout in 2025. Of course, all our elite picks aren't winners but this one could far surpass earlier Zacks' Stocks Set to Double like Hims & Hers Health, which shot up +209%.
Free: See Our Top Stock And 4 Runners UpWant the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Paycom Software, Inc. (PAYC): Free Stock Analysis Report
BILL Holdings, Inc. (BILL): Free Stock Analysis Report
Block, Inc. (XYZ): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).