3 years since Block shares listed on the ASX: It was set to soar new heights in 2025, until Trump’s tariffs

The Afterpay acquisition was not just noteworthy because it was the biggest corporate takeover in Australian history, but also because Block shares listed on the ASX rather than just snapping up Afterpay shares and never to be heard from again.

Shares in the Jack Dorsey-founded company (which since early January 2025 have traded under the ticker XYZ rather than SQ and SQ2 in conjunction with its name change) have been underwater for most of its listed tenure due to the Tech Wreck. For the last quarter of 2024, they were trending upwards, but then Trump’s tariffs. Is this a chance to ‘buy the dip’? Or is it a case of ‘When things are glum, there’s worse to come’.

 

Why are Block shares listed on the ASX?

Because, as noted above, it acquired Afterpay. And the deal was paid in its own shares rather than cash, because it lacked the cash reserves to pay in that way.

Block shares on the ASX are listed as CDIs (Chess Depository Indices), as are most of the US companies with dual listings on the ASX. Unlike many others, Block CDIs are strictly 1:1 – 1 CDI represents 1 ordinary share in the company.

 

Who is Block?

Block is a US fintech, formerly known as Square, founded by Jack Dorsey in 2009. Dorsey founded Twitter just 3 years earlier, but was inspired to start Block after a friend of his couldn’t complete a $2,000 sale of glass faucets and fittings because the other party could not accept credit cards.

Block has two main parts to its business. Its Seller business manages payments and lends money to merchants and its Cash App that allows consumers to transfer, spend and invest money. The latter has over 50m Monthly Active Users while the former is used by over 30% of US small businesses. And of course, it has Afterpay.

The company’s vision is to,’ Increase access to the economy’.

 

One App to rule them all?

In buying Afterpay, Block made Afterpay as a payment method in both apps. Block has also made forays into crypto, with a business called TBD that is focused on creating crypto developer tools. Its Cash App also supports bitcoin. Finally, it owns Tidal, a music streaming platform founded by Jay-Z. The jury is still out on how it fits into the company’s boarder business strategy.

The company has benefited from the shift of transactions from physical cash into the digital world. It generated US$228bn in Gross Payment Volume in 2023.

 

2024 was solid

Shares closed the year 25% higher than where they begun, but much of the growth came in the final quarter. As of May 1, 2025 – shares are down 34%. Investors were confident that rate cuts would accelerate growth. Revenue for 2024 came in at US$24.1bn, up 10% from 2023. It made EPS of $3.37, up from $1.67 a year before. US stocks focus more on EPS rather than profit, because share buybacks sure help with a company’s EPS. But investors did not like the result because they ‘missed consensus [estimates]’.

The company’s objectives include profitable growth and to achieve the so-called ‘Rule of 40‘ in 2026. For CY25: It had guided to a $10.2bn gross profit (up 15%), adjusted operating income of $2.1bn (a margin of 21%) and a 35.5% Rule of X (in other words, to get to 35.5% of the 40% of the Rule of 40).

 

Growth ahead?

The company purports to have penetrated less than 5% of its market and that the market keeps expanding. It claims that there is a US$75bn opportunity for the Cash App and $130bn for the Business Division (which it calls Square). The Cash App is predominantly used by Millennials and Gen Z, although it is only 34% and 25% penetrated in those demographics.

Unfortunately, the Tech Wreck meant that investors went cold on ‘growth at any cost’ companies, in other words, companies that are not profitable. Just when things looked to be turning around with a solid last quarter of 2024, Trump’s tariffs unleashed chaos and uncertainty on the world.

Block’s quarterly results for the March quarter of 2025 led to a 25% share price crash. Square GPV grew 7.2%, but muted consumer spending (as well as a remeasurement loss on the company’s bitcoin investments) meant the company’s net income/profit more than halved. Its Cash App had gross profit growth, but just by 10% instead of 25% a year ago.

The company expects a second quarter gross profit of US$2.45bn, below previous estimates of US$2.54bn and it cut the forecast for the full-year 2025 gross profit growth to 12% from 15%.

While not hiding away from the short-term, it promised the long-term looked better and that it was addressing key areas that would drive to growth including attracting teens and families to the cash app, making controls in the Cash App that ‘unintentionally disrupted good customers’ and increasing high-ROI marketing spend.

 

Block is one to watch

Consensus estimates for 2025 call for US$26.2bn in revenue and $4.35 EPS, up 9% and 30%. For CY26, $28.9bn revenue and $5.17 EPS, up 10% and 19% respectively. Then in CY27, $31.3bn revenue and $6.24 EPS, up 8% and 21% respectively. NYSE analysts, of which there are 43 of them, call for a share price of US$83.29, a 42% premium to the current share price.

It must be admitted that there is a divergence of opinion with the lowest estimate being US$35 per share and the highest US$112 per share. But these estimates place the company at just 8.1x EV/EBITDA, 11.3x P/E and 0.53x PEG for CY26 – cheap multiples in our book.

We think investors need only look at the example of Life360 (ASX:360) to show that US-headquartered companies on the ASX can re-rate if they can deliver profitable growth. So Block could be a ‘buy the dip’ opportunity right now.

 

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