Block (NYSE:XYZ) stock is surging today, up roughly 6% in Wednesday trading after a confluence of catalysts reignited investor enthusiasm. The move comes on the heels of strong Q4 fiscal 2025 results, a sweeping workforce reduction, and continued analyst support that together paint a picture of a leaner, more focused company.
Block shares are trading above $63 today, bouncing off a previous close of $59.79. That’s welcome relief for shareholders who had watched the stock slide 11.14% year-to-date heading into today’s session.
So, let’s break down what’s actually driving the move and what investors should keep an eye on from here.
Q4 Results Show Real Business Momentum
Block’s Q4 2025 earnings report, filed February 26, delivered an adjusted EPS of $0.65, beating the consensus estimate of $0.6393. Revenue came in at $6.25 billion, up 3.64% year over year, missing estimates slightly but masking genuinely strong underlying momentum.
The real story is gross profit. Block generated $2.87 billion in gross profit, up 26.14% year over year, with Cash App gross profit alone rising 33% year over year. Free cash flow hit $580 million, a dramatic improvement from the prior year period.
Cash App’s lending arm is also accelerating fast. Cash App Borrow origination volume surged 223% year over year, while consumer lending origination volume rose 69% year over year to $18.5 billion. It’s becoming a core revenue engine, with Cash App Borrow origination volume surging 223% year over year.
4,000 Job Cuts: Discipline, Not Distress
The headline that rattled some observers was Block’s announcement that it’s cutting its workforce from more than 10,000 employees to under 6,000, a reduction of over 40%. CEO Jack Dorsey framed it like this: “We’re reducing Block by nearly half, from over 10,000 people to just under 6,000, which means that over 4,000 people are being asked to leave or entering into consultation.”
The rationale is an AI-native transformation strategy. Dorsey added, “Intelligence tools have changed what it means to build and run a company. A significantly smaller team, using the tools we’re building, can do more and do it better.” Investors appear to be buying that argument, at least for now.
The financial payoff from the cuts is expected to build through the year. A more meaningful impact on adjusted operating income is anticipated in Q2 2026, with the full cost structure benefit realized in the second half of 2026. Block’s full-year 2026 guidance calls for adjusted operating income of $3.20 billion and adjusted diluted EPS of $3.66.
Analyst Support Keeps the Floor in Place
Morgan Stanley is maintaining its Buy rating on Block, and Truist Securities upgraded Block to Buy and raised its price target from $72 to $77 on March 18, 2026. Raymond James also upgraded the stock following the Q4 results. The average analyst price target sits at $86.40, well above where shares are trading today, implying meaningful upside according to Wall Street consensus.
TD Cowen’s Bryan Bergin reiterated a Buy rating with a $95 price target on March 27, following European investor meetings that affirmed Block’s progress on its workforce reset and AI adoption. Meanwhile, Morgan Stanley’s James Faucette maintained a Buy rating with a $93 price target on March 21, 2026. The analyst community is broadly aligned that today’s price is a discount to fair value.
A Balanced Look: Risks Remain Real
Granted, it’s not all smooth sailing. Block’s levered free cash flow on a trailing 12-month basis is -$1.03 billion, a reminder that the business still has work to do on capital efficiency. Transaction, loan, and consumer receivable losses rose 108% year over year, driven by the rapid expansion in lending volume.
That said, the valuation case is hard to ignore. Block trades at a forward P/E ratio of 16x and a price-to-sales ratio of 1.54x on trailing 12-month revenue of $24.19 billion. For a company guiding toward 54% year-over-year growth in adjusted EPS, that multiple looks reasonable rather than stretched.
What to Watch Next
The next major catalyst is Block’s Q1 2026 earnings report, expected around April 30. Management has guided for Q1 gross profit of $2.8 billion and adjusted EPS of $0.67. Watch for whether the cost savings from the workforce reduction are starting to show up meaningfully in the operating income line.
All in all, today’s move reflects investors repricing Block’s improving earnings trajectory and margin story. Whether it holds above the $63 level into the close will tell us something about how much conviction is behind this rally.
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