Block (XYZ) Pushes For Builders Bank On An Undervalued Narrative

Block (XYZ) has set a new regulatory goal. The company has applied to the Office of the Comptroller of the Currency to form Builders Bank & Trust, a federally supervised, uninsured national trust bank.

Recent trading tells a mixed story for Block. The share price is about $79.40, with a 90-day share price return of 14.92% and a year-to-date gain of 21.87%. However, the 5-year total shareholder return has declined 68.09%, suggesting long term holders have felt more pain than the recent momentum implies.

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Bulls see Block using Builders Bank to cement its crypto custody ambitions, while bears worry about added regulatory load on an already volatile model. Which side does the current valuation evidence support next?

Most Popular Narrative: 19% Undervalued

Block's most followed narrative points to a fair value of $97.60, which sits above the recent $79.40 share price and frames Builders Bank as one more lever in a broader fintech thesis.

The rapid acceleration in new product launches, especially around peer-to-peer features (like Cash App Pools) and integration of AI into product development, is heightening Cash App's network effects and virality. This is likely driving improved user acquisition and engagement, which supports recurring revenue expansion in future quarters.

Read the complete narrative. Read the complete narrative.

Curious what sits behind that higher fair value for Block? The narrative leans heavily on compounding earnings, richer margins, and a future profit multiple usually reserved for mature software leaders. The full breakdown shows how those levers are expected to work together over time.

Result: Fair Value of $97.60 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

Still, Block's reliance on Bitcoin related activity and the credit risk tied to Borrow and BNPL could quickly challenge the current upside narrative.

Find out about the key risks to this Block narrative.

Another View on Block's Valuation

The DCF based fair value points one way, but the earnings multiple paints a much richer price tag for Block. The current P/E of 134.4x is far above the estimated fair ratio of 36x, the US Diversified Financial industry at 17.1x, and peers at 11.9x. That kind of gap often signals either extra risk if expectations slip or potential reward if profit forecasts play out. Which side do you think the market is really paying for?

To see how this earnings multiple story holds up against a full valuation breakdown, including that fair ratio and peer context, take a closer look at the detailed assessment next: See what the numbers say about this price — find out in our valuation breakdown.

Next Steps

Mixed signals can feel confusing, especially with a story as charged as Block's Builders Bank push and crypto exposure. Act quickly by weighing both sides of the thesis, then stress test your own view against the 3 key rewards and 3 important warning signs

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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.

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