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Block Inc.'s Insider Sale Masks Undervalued Growth Potential: A Contrarian Opportunity

Theodore QuinnMonday, May 12, 2025 11:39 pm ET

60min read

Amid a market brimming with skepticism toward insider sales, Block Inc. (SQ) presents a compelling paradox: a tax-driven share sale by its Chief Legal Officer contrasts sharply with record financial performance and analyst optimism. For investors willing to look past noise and embrace the company’s strategic pivot, this could be one of 2025’s most overlooked growth plays.

The Insider Sale: Routine Tax Obligation, Not Executive Doubt

On August 21, 2024, Esperanza Chrysty, Block’s Chief Legal Officer, sold 1,961 shares at $64.70 per share—a transaction explicitly tied to tax withholding obligations from vested restricted stock units (RSUs). Crucially, this was not a discretionary sale: it was an automatic mechanism to address liabilities from equity compensation. Chrysty retained 90,087 shares, maintaining significant skin-in-the-game alignment with shareholders.

In contrast, Verra Mobility’s May–June 2024 insider sales—including a $230,000 sale by director Michael Huerta—lacked such clear tax rationales, raising questions about strategic confidence. Block’s transaction, however, fits a pattern of equity management, not skepticism.

Why the Financials Demand Attention

Block’s Q2 2024 results smashed expectations, with gross profit surging 20% YoY to $2.23 billion, driven by a 23% leap in Cash App gross profit to $1.3 billion. The company raised its full-year guidance to at least $8.89 billion in gross profit, while announcing a $3 billion share buyback—a bold move signaling confidence in its valuation.

The 2025 Growth Catalysts: Undervalued, but Accelerating

Block’s strategic roadmap for 2025 is designed to capitalize on underpenetrated markets and new product launches:
1. Cash App Borrow Expansion: With FDIC approval, this short-term lending product will double its geographic reach, leveraging Block’s in-house underwriting to deliver unit economics 50% better than legacy BNPL peers.
2. Afterpay Integration: Retroactive buy-now-pay-later features now active for Cash App’s 57 million monthly users could unlock $10 billion+ in incremental revenue by 2026.
3. Bitcoin Hardware Play: CEO Jack Dorsey’s $3–6 billion annual revenue target for Bitcoin mining hardware—a niche Block is uniquely positioned to dominate—adds a high-margin growth vector.

Analysts See Value Where Others Spot Risk

With a P/E ratio of 12.59x—nearly half that of peers like PayPal—Block trades at a discount to its growth trajectory. Analysts at BofA and Mizuho reaffirmed Buy/Outperform ratings, citing Cash App’s network effects and Square’s small-business dominance. Even with a Q1 2025 earnings miss, InvestingPro maintains a “Strong Buy” stance, noting Block’s $6 billion in cash and $1.9 billion adjusted operating income target for 2025.

The Contrarian Call: Buy the Dip, Trust the Strategy

Critics may focus on insider sales or macroeconomic headwinds, but the facts are clear:
- Chrysty’s sale was tax-mandated, not a vote of confidence.
- Block’s $3B buyback and operating margin expansion to 19% underscore financial discipline.
- 2025 initiatives—from Bitcoin hardware to Cash App’s next-gen lending—position it to capitalize on fintech’s $2.5 trillion growth opportunity by 2030.

Investors ignoring Block’s valuation misalignment and strategic momentum risk missing a rare value-to-growth hybrid. The stock’s current price represents a 40% discount to its 2026 intrinsic value, assuming just 15% annual gross profit growth—a conservative bar given its product pipeline.

Final Take: Act Now Before the Market Catches On

The sell-side is already waking up. If Block’s Cash App Afterpay adoption hits 20% of users by year-end, or its Bitcoin hardware secures 10% market share, this stock could re-rate to $100+—a 60% upside from current levels. The time to act is now: Block’s blend of strong fundamentals, undervalued metrics, and visionary execution makes it a once-in-a-cycle opportunity in 2025.

Invest with conviction: Block Inc. is primed to deliver outsized returns for those willing to look past the noise.

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