Is Block, Inc (XYZ) overvalued?
On Equity Rank's model estimate, XYZ trades 28% above its fair value. Block, Inc (XYZ) last closed at $85.48; the multi-method model fair value is $66.89.
| Price | Model fair value | Price vs model |
|---|---|---|
| $85.48 | $66.89 | 28% above |
What the answer rests on
- 2 of 11 valuation methods put XYZ's value above its price and 9 put it below, so the methods mostly agree.
- To justify today's price, XYZ's free cash flow would need to grow about 11.6% a year for ten years (a reverse discounted cash flow). Over the last three years it actually grew 681.1% a year.
- XYZ trades at 115.3 times its last year's earnings, against a median of 26.9 for 8 profitable Fintech companies.
- Over the past year the price sat below the model fair value on 79% of trading days. The gap ranged from 25% below to 26% above the model fair value.
Read this before relying on it
The model fair value is an estimate from published financial statements. It is not a forecast of where the price goes, and it can be wrong. Within 10% either side we call it close to fair value: valuation models are not precise enough to read more into a smaller gap. Our own lists have no proven edge over the market yet; the live record shows every result, misses included.
Every valuation method behind XYZ's fair value · What prices assume · Other companies