Block's Cash App Diversification: Can It Boost Growth?

Block’s XYZ Cash App is a consumer-focused digital wallet enabling peer-to-peer payments, spending and investing. The platform offers the Cash App Card, a Visa debit card linked to user balances and Cash App Borrow, which provides small personal loans to eligible users.

Block is expanding its BNPL capabilities through Afterpay by embedding installment payment features directly into Cash App. Management expects 90 million Americans to use BNPL later in 2026, and the volume is anticipated to double by 2031. Cash App also plays a key role in Block’s bitcoin strategy, allowing users to buy, sell and hold bitcoin seamlessly. The platform has seen strong adoption, with cumulative bitcoin transaction volume exceeding $58 billion, positioning it as a meaningful growth driver.

In July 2025, Cash App introduced “Pools,” a feature enabling group payments, and launched Tap to Pay on iPhone for business sellers, allowing them to accept contactless payments directly via the Cash App iOS app.

Block’s financial performance remains robust. In fourth-quarter 2025, Cash App generated gross profit of $1.83 billion, up 33.1% year over year, driven by growth in Cash App Borrow, Cash App Card and BNPL. Primary banking actives rose 22% to 9.3 million, while monthly transacting actives reached 59 million.

Block’s continued expansion of Cash App across lending, BNPL, bitcoin and merchant payments underscores its ambition to build a comprehensive consumer finance ecosystem. Strong user growth and rising engagement provide a solid foundation, but sustained momentum will depend on scaling these offerings seamlessly while managing credit and regulatory risks.

How Are PayPal and Alphabet Doing in This Space?

PayPal PYPL offers the Venmo app, a money movement platform for the young, affluent and digitally native consumers. This application enables the transfer of money between family and friends via mobile devices. In March 2026, Venmo announced a major expansion, extending its peer-to-peer payment experience to users worldwide. Venmo users can now send and receive money to/from hundreds of millions of PayPal users across 90 markets.

Alphabet’s GOOGL Google Pay is bundled under Google Services, which is its mobile payment and digital wallet application. Users link their debit cards, credit cards or bank accounts to the app and can make payments online, in apps or in stores using tap-to-pay on their smartphones. Google services revenues grew 12.4% year over year in 2025.

XYZ’s Price Performance, Valuation & Estimates

Shares of Block have declined 12.4% in the past three months, outperforming the broader industry but underperforming the S&P 500 Index.

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In terms of forward 12-month P/E, XYZ stock is trading at 14.97X, which is at a significant discount to the Zacks Internet Software industry’s 24.19X.

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Block’s estimate revisions reflect a positive trend. The Zacks Consensus Estimate for full-year 2026 EPS has been revised northward 7.5% over the past month. It indicates a significant increase year over year.

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Block currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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