Latest news with #AdamFrisch
Yahoo
23-07-2025
- Business
- Yahoo
Block Stock Pops in S&P 500 Debut
On Monday, Jack Dorsey's sprawling fintech empire Block became the new kid on the block at the S&P 500, taking a spot left vacant by Hess's merger with Chevron. Its membership in the elite index comes as the company transitions into an all-in-one finance platform, though its ambitions may belie a slightly more complicated reality. READ ALSO: Fine Print: ETFs Born in Banner Year May Lack Staying Power and Gates-Backed 'Green Steel' Startup Clears Key Milestone Don't Be a Square Block has been a rather ubiquitous part of the payments ecosystem for a while now, from powering morning coffee purchases via Square's payment systems to helping friends split the bill of said morning coffee purchases via the peer-to-peer payments platform CashApp. The company also has a buy now, pay later service called Afterpay, for the installment-inclined and plenty of crypto functionality for the blockchain-inclined. More recently, however, the company has begun pushing into every corner of personal finance, with moves such as offering CashApp debit cards and, after receiving FDIC approval earlier this year, offering loans directly through Cash App. Taking a spot in the S&P 500 is a stamp of approval and legitimacy for the fintech firm. But the problem with offering typical financial services outside of the traditional finance world? It tends to attract clients with less cash to spare who are, consequently, more vulnerable to economic challenges, as evidenced by the company's most recent earnings report in May: In its earnings call, Block reported revenue of $5.8 billion in the first quarter of the year, well below analysts' expectations of about $6.2 billion and marking a 3% year-over-year decrease. The company also announced weaker-than-expected full-year profit guidance. The dip was largely due to lower-than-expected payment volumes across its Square and CashApp ecosystems, particularly in discretionary spending categories such as media and travel. The dour results stood in stark contrast to those of more traditional firms in the payments sector, including both major banks and prominent credit card companies, whose customers have proven resilient this year. '[Block] saw softness in discretionary,' Adam Frisch, senior managing director at Evercore ISI, told Bloomberg after the earnings report. 'That is the first time we heard that on any earnings call this quarter.' On the Chopping Block: May's poor showing fueled a brutal 20% share-price skid, on top of a 30% year-to-date drop before the call. Monday's S&P debut helped reverse the trend somewhat, with Block's stock popping roughly 7% before market close (it's still down around 10% year to date). Meanwhile, some point to increased lending as adding complexity and risk to the company's business, given its client base. 'If we're going into a downturn lending to a consumer cohort that makes less than $100,000 on average, that's not a great way to resuscitate your earnings,' Frisch told Bloomberg. This post first appeared on The Daily Upside. To receive delivering razor sharp analysis and perspective on all things finance, economics, and markets, subscribe to our free The Daily Upside newsletter. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
08-07-2025
- Business
- Yahoo
Shift4 strategy segues with Global Blue
This story was originally published on Payments Dive. To receive daily news and insights, subscribe to our free daily Payments Dive newsletter. Shift4's latest acquisition, of the Swiss payments technology firm Global Blue, has perplexed analysts who follow the digital payments processor. When the Allentown, Pennsylvania-based payment company pursues other companies to buy, it generally targets firms that can help it extend payment processing services to more merchants, according to analysts who cover the company. But Global Blue's merchant customers are already well-served by major payment players. Shift4 has a solid history of acquisitions, Evercore ISI analyst Adam Frisch said in an interview. "But this one, from a strategic point of view, seems a little off." Shift4 buys other companies with the intent to access more merchants, Frisch said. "Global Blue offers access to merchants, but via a path which is somewhat unorthodox to how they've done it in the past,' he explained. The Pennsylvania processor announced in February that it plans to buy Global Blue for an enterprise value — which includes taking on debt — of $2.5 billion. The company announced on Thursday that the merger is complete. Prior to Thursday's announcement, Shift4 extended a tender offer to buy all of Global Blue's outstanding shares five times, according to filings with the Securities and Exchange Commission. Analysts who follow the company, including Matt Coad of Truist Securities, said the delays were not a reason for concern. "There are complexities" in international mergers, he said in an interview prior to the merger's completion. "Swiss regulators are doing more due diligence. Extending the offer isn't a big deal. Shift4 has a strong plan to make the acquisition work by merging a key tax processing service with its own, Thomas McCrohan, Shift4's executive vice president for investor relations, said in a July interview. The purchase will be the firm's largest. The company already operates in Europe, Asia and South America at about 400,000 retail and hospitality locations, but the acquisition will extend its reach. The deal is 'a little bit different for (Shift4), but makes sense as they continue to push into international markets,' Gimme Credit Senior Bond Analyst Stu Novick said by email in February. Some of Shift4's other recent purchases include Smartpay Holdings last month, which operates a distribution network selling payment services to businesses in Australia and New Zealand, and the Canadian firm Eigen Payments last December. The Smartpay purchase was "another acquisition that will run the Shift4 playbook," RBC Capital Markets analyst Dan Perlin said in a June note to investors. Shift4 will almost certainly encourage Eigen customers to move to its processing platform, Perlin wrote. Eigen offers point-of-sale and online ordering services and serves a different clientele than Shift4, said Matt Coad, an analyst for Truist Securities, which gives the payment processing company an opportunity to market to Eigen's existing clients. The payments processor follows a similar strategy with most of its mergers by looking for companies that can help it reach more merchant clients, he said. That makes the Global Blue acquisition somewhat confounding, because the Swiss company serves higher-end merchants who already work with well-known payment companies like Ayden and Stripe, Coad said. Global Blue's customers include high-end luxury brands such as Louis Vuitton, Hermes, Valentino, and Prada, said Shift4 President Taylor Lauber in a February Earnings call with investors. "It's hard to win that payment processing from Adyen and Stripe," Coad said. While major luxury retailers like Louis Vuitton might not be willing to jump ship, Global Blue also works with smaller luxury retailers, McCrohan said. "We're not approaching Global Blue thinking that we're going to displace Adyen," he said. "We're approaching them thinking that they have a long tail of single location boutique customers that are reliant on a local bank" for payment processing. Those retailers might be persuaded to switch thanks to a secret weapon Shift4 will gain in the struggle for merchant clients: a value-added tax refund processing service offered by Global Blue. Countries like France and Germany charge a value-added tax (VAT) — a complex levy that takes into account various stages in the supply chain that moves a product from the factory floor to the store shelves — on high-end purchases. The U.S. does not charge a value-added tax, which means travelers from this country who buy a product in a foreign nation or have something shipped to the U.S. from a VAT country can have the value of the tax refunded to them. Few of Shift4's competitors offer VAT refund processing, McCrohan said. It's a 'unique and important capability," he said. Recommended Reading Shift4 buys Smartpay for $180M Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
03-07-2025
- Business
- Yahoo
Why Block Stock Zoomed 10% Higher in June
Analysts were generally bullish on the company during the month. It also demonstrated that it's innovating in the product sphere with a new handheld device. 10 stocks we like better than Block › Block (NYSE: XYZ) had a decent, if unspectacular, June, ultimately emerging from the month with a 10% gain in share price. A product launch in an important market overseas, announced as we approached July, was a catalyst, as were several positive analyst notes across the preceding weeks. In the opening days of the month, Block earned a recommendation upgrade from Evercore ISI, whose analyst Adam Frisch ticked up his rating to outperform (buy, in other words) from in line (hold). With that, he also substantially increased his price target to $75 per share from the former $58. According to reports, Frisch's move was based on several factors, including the lack of more aggressive -- and therefore risky -- company lending to customers of its popular Cash App. The analyst also said that low-end consumer spending trends were holding steady; these support the small and mid-sized businesses that typically use the company's Square point-of-sale payment system. Frisch was also heartened by new product rollouts from the company in both the hardware and software realms. In terms of the stock's valuation, the pundit wrote that it was cheap on several metrics when matched against peer fintech companies. This positive tone was matched by several other Block-watching analysts during the month. While none went so far as to change their recommendation like Frisch, several either reiterated their existing bullish takes or raised their price targets. Among the latter was Barclays's Ramsey El-Assal, who pushed his fair value assessment higher, to $75 per share from $57. He also maintained his overweight (buy) recommendation. Block did take a bit of a hit to its stock price when a Wall Street Journal article stated that top U.S. retailers were exploring ways to process stablecoin payments. Much of this has to do with saving fees charged by companies like Block and credit card processors for transactions effected through their networks. The mood seemed to change when Block announced the rollout of its recently introduced Square Handheld to the U.K. market. This is a point-of-sale device that looks (and in some ways acts) like a smartphone. Given its form factor and the payment software packed inside, it's ideal for restaurants, a crucial Block customer demographic. Block has always been a strong performer in the transaction management space, particularly within its wheelhouse of small and mid-sized businesses. But it's something of a wild card since it likes to plunge into other related finance segments in a way that feels almost haphazard. Its embrace of cryptocurrencies, for example, feels less than careful and has introduced a significant degree of risk. With that wild card quality, I would personally shy away from the stock. I feel there are other titles in the fintech space more worthy of consideration. Before you buy stock in Block, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Block wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $722,181!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $968,402!* Now, it's worth noting Stock Advisor's total average return is 1,069% — a market-crushing outperformance compared to 177% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of June 30, 2025 Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Block. The Motley Fool recommends Barclays Plc. The Motley Fool has a disclosure policy. Why Block Stock Zoomed 10% Higher in June was originally published by The Motley Fool Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
CNBC
03-06-2025
- Business
- CNBC
Evercore ISI says this beat-down fintech stock can stage a recovery rally
Evercore ISI turned bullish on Block , citing enough positive indicators on business fundamentals despite a rough patch for shares. Analyst Adam Frisch upgraded shares of the financial technology platform to outperform from in line and hiked his price target by $17 to $75. Frisch now expects shares can jump 21.4% over Monday's close. One driver of the upgrade is that the Cash App platform won't be as aggressive on lending as originally expected following first-quarter earnings. Frisch initially believed that lending could be used to offset lower numbers, but conversations with contacts soothed those concerns. He noted that the company doesn't absorb all of the losses as they are diversified within a broader group of investors. "When we heard mgmt talk about their plans to increase lending to new consumers in new states and with higher limits on the 1Q25 earnings call, we admittedly got very worried that the strategy to get more aggressive on lending to offset lower spending levels would lead to significant losses in 2H25 and potentially beyond," Frisch wrote to clients in a Tuesday note. "However, we were left more positive after speaking to management about XYZ's various funding sources across its lending portfolio." Frisch also said the lower-end consumer is showing steady spending trends despite macroeconomic uncertainty. Additionally, he said new product releases can aid growth going forward and noted that valuation is still attractive despite the stock's recent pop. With this call, Frisch is in the majority of Wall Street analysts with buy-equivalent ratings, according to LSEG. His price target also went from below to above average, per the market data provider. XYZ YTD mountain Block in 2025 Block shares added more than 3% in Tuesday's premarket. Despite a bounce of more than 5% last week, the stock has still plunged more than 27% in 2025.
Globe and Mail
02-05-2025
- Business
- Globe and Mail
PayPal Holdings (PYPL) Gets a Hold from Evercore ISI
In a report released yesterday, Adam Frisch from Evercore ISI maintained a Hold rating on PayPal Holdings (PYPL – Research Report), with a price target of $65.00. Protect Your Portfolio Against Market Uncertainty Discover companies with rock-solid fundamentals in TipRanks' Smart Value Newsletter. Receive undervalued stocks, resilient to market uncertainty, delivered straight to your inbox. According to TipRanks, Frisch is a 2-star analyst with an average return of 15.7% and a 100.00% success rate. Frisch covers the Technology sector, focusing on stocks such as Shift4 Payments, Block, and Toast Inc. In addition to Evercore ISI, PayPal Holdings also received a Hold from UBS's Timothy Chiodo in a report issued yesterday. However, on the same day, Barclays maintained a Buy rating on PayPal Holdings (NASDAQ: PYPL). Based on PayPal Holdings' latest earnings release for the quarter ending March 31, the company reported a quarterly revenue of $7.79 billion and a net profit of $1.29 billion. In comparison, last year the company earned a revenue of $7.7 billion and had a net profit of $888 million Based on the recent corporate insider activity of 34 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of PYPL in relation to earlier this year. Most recently, in February 2025, Gail Mcgovern, a Director at PYPL sold 2,446.00 shares for a total of $176,478.90.
