Block (XYZ -1.99%) stock, when it was formerly Square, was a market darling that soared quickly and was seen as the face of the fintech revolution. But it's made a few missteps, earning severe market pessimism. Although it has grown quite nicely over the past few years, Block stock is 77% off its all-time high. Let's see what's happening at Block and whether or not it can be a millionaire-maker stock.
Cutting-edge innovation
Block first came onto the scene with its white, square-shaped credit card reader that could attach to a smartphone to accept payment. It was a truly innovative concept that added real value for merchants, democratizing commerce and helping small businesses become bigger players. That business developed into what's still called the Square Sellers business.
Although much attention has been given to Square's other businesses, the sellers business continues to resonate with its core small business clientele and generate growth. In the 2025 first quarter, Square gross payment volume (GMV) increasd 8.2% year over year (currency neutral), and gross profit was up 9%. Customers appreciate the platform's ease of use and technological expertise, and the company is rolling out new features targeting niche business types to make it even more valuable. For example, it offers restaurants the ability to set up integration with DoorDash and Uber's Uber Eats in minutes.
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The Cash App personal finance business is one of the most popular personal finance apps on the market. Management has many ideas to boost growth for Cash App. It's focused on "banking its base," driving adoption of its banking services, and it's targeting families and teens, demographics it believes are underserved. One area it's investing in is microloans, which increase engagement.
Gross profit per monthly transacting active customer jumped from $74 to $81 in the first quarter, and inflows per monthly transacting active customer increased 8% year over year, driven by more customers using Cash App for paycheck deposits.
It has 7 million users that rely on it for financial services, a large base to bank, but also a small enough number to present high user growth opportunities.
However, management admitted that inflows and spending were lower than expected, and that led to guidance misses. Total revenue was down 3% from last year, and earnings per share (EPS) dropped from $0.74 to $0.30.
More innovative than the market wants
There's pressure in Block's better businesses, and management has waded into other waters that look even more risky. It's been a proponent of Bitcoin for a few years already, and that's affected the business both positively and negatively, depending on the season. In Q1, net income dropped precipitously from last year due to a remeasurement of Bitcoin. Block also counts Bitcoin trading as revenue, and that has propped up total revenue growth on several occasions.
Beyond buying Bitcoin and offering trading to users through its Bitkey wallet, Block also offers Proto, a Bitcoin mining service, and Tidal, a music artist platform. These ancillary businesses take away from its more formidable core businesses. Even changing its name to Block and its ticker to XYZ makes me wary.
Management also said that it's switching to agentic systems for all of its workflows. It already claims a 30% increase in engineering productivity, but I hesitate to get too enthusiastic about reliance on artificial intelligence-based tools when Block is falling behind in other areas.
A deep value or a value trap?
Unsurprisingly, as Block stock has plunged, it's trading at a lower valuation that makes it look more compelling. It trades at 16 times trailing 12-month earnings and 17 times forward, 1-year earnings. But you already see the problem there, since it implies that analysts aren't expecting earnings to increase much over the next 12 months.
At this price, if you believe that Block has a long growth runway, this could look like a great deal. If the stock climbs and you put in enough money, it could supercharge your investment and be a part of a millionaire-maker portfolio.
As you've probably guessed, I'm not in the buy camp, although I can certainly understand investors who are. Although I see the strengths, I'm not a fan of the speculative parts of this business, and it's above my personal risk level. If you're looking for a millionaire-maker stock, there are others out there that I'm more optimistic about.
