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    Cash App’s Higher-Risk Monetization Push Might Change The Case For Investing In Block (SQ)

    Simply Wall St·08/22/2026 01:32:54
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    • In Q2 2026, Block reported strong results as Cash App gross profit rose 31% year over year, supported by Financial Solutions and Commerce Enablement, while Cash App Borrow origination increased 59% alongside higher monetization rates.
    • Management also cautioned that borrowing growth may normalize and highlighted rising loan losses and sales and marketing expenses, underscoring the trade-off between deeper monetization and higher risk and cost.
    • Next, we’ll examine how Cash App’s improved monetization, particularly through stronger Borrow activity, affects Block’s existing investment narrative and risk profile.

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    Block Investment Narrative Recap

    To own Block, you need to believe Cash App can keep deepening engagement and monetization across its ecosystem, while Square for sellers remains relevant in an increasingly crowded payments market. The latest quarter’s strong 31% Cash App gross profit growth and 59% Borrow origination jump support the near term catalyst of higher monetization, but the rise in loan losses and marketing spend reinforces that credit quality and profitability are the key risks to watch right now.

    Alongside Q2 results, Block continued buying back stock, with about US$4,425.81 million spent to retire roughly 11.03% of shares under the existing repurchase program. That capital return policy is particularly relevant given the company’s recent earnings volatility and elevated price to earnings multiples, since it interacts directly with per share metrics that many investors are tracking as they weigh the benefits of stronger Cash App monetization against rising credit and operating risks.

    Yet behind the strong Borrow growth, investors should be aware of rising loan losses and what they might signal about...

    Read the full narrative on Block (it's free!)

    Block's narrative projects $33.7 billion revenue and $3.8 billion earnings by 2029.

    Uncover how Block's forecasts yield a $97.60 fair value, a 19% upside to its current price.

    Exploring Other Perspectives

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    XYZ 1-Year Stock Price Chart

    While consensus leans on Cash App’s growth, the more pessimistic analysts focus on regulatory and crypto risks, even though they still expected revenue near US$31.1 billion and earnings around US$2.9 billion by 2029.

    Explore 9 other fair value estimates on Block - why the stock might be worth as much as 24% more than the current price!

    Decide For Yourself

    Disagree with existing narratives? Extraordinary investment returns rarely come from following the herd, so go with your instincts.

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    This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.