Block's Ecosystem Expansion: Will Partnerships Boost Profitability?

Block’s XYZ merchant-facing business, Square, has expanded its partnership with, Thrive, a leading inventory management reporting system. This partnership helps Square sellers easily sync catalogs, sales, and inventory across both in-store via Square POS and online via Shopify. The Thrive integration is now available to Square sellers in the United States, Canada, the U.K., Australia and Spain.

The integration allows retailers to create and modify catalog items in Square, with all changes automatically reflecting in Shopify. With Square serving as the source of truth, sellers can prevent overselling, streamline re-ordering, and save time spent on managing multiple systems.

With 50% of Square’s retail sellers operating across channels, staying on top of inventory, orders and customer happiness can be challenging. The new Thrive integration simplifies this process by seamlessly connecting in-store and online channels, eliminating manual reconciliation and giving retailers more time to focus on what matters most: delivering exceptional customer experiences.

In another move, Block’s wholly owned subsidiary, Afterpay, made several new partnerships ahead of the holiday shopping season. These partnerships offer consumers greater payment flexibility and meet diverse needs across fashion, lifestyle and home categories.

Square also partnered with a South London bakery chain, Blackbird Bakery, to replace Blackbird’s outdated till system with Square’s POS and integrated Kitchen Display System. Moreover, Block teamed up with Grubhub to upgrade restaurants' food ordering ecosystem. The deal integrates Square’s POS system and adds Cash App Pay as a checkout option for Grubhub customers. These partnerships highlight Block's strategy to diversify its offerings and strengthen its position in the market.

How Are Block’s Competitors Faring?

Affirm Holdings, Inc. AFRM expanded its partnership with REVOLVE to bring flexible payment options to shoppers in Canada and the U.K. The company deepened ties with Shopify to introduce Shop Pay Installments in the U.K, enabling shoppers transparent, fee-free payment flexibility. Affirm partners with Pacsun for shoppers to pay over time and partners with New York Life for installment financing.

PayPal PYPL partnered with Logicbroker, allowing thousands of Logicbroker’s merchants to seamlessly activate PayPal’s agentic commerce services, including store sync and future agentic payment capabilities. PayPal and OpenAI have formed a strategic partnership to enable seamless payments and agentic commerce experiences directly within ChatGPT.

XYZ’s Price Performance, Valuation & Estimates

Shares of Block have declined 17.2% in the past three months, underperforming both the broader industry and the S&P 500 Index.

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From a valuation standpoint, Block shares are overvalued, as suggested by the Value Score of C.

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Block’s estimate revisions reflect a negative trend. The Zacks Consensus Estimate for full-year 2025 EPS has been revised downward over the past month. The Zacks Consensus Estimate for 2025 EPS suggests a 28.2% decrease year over year.

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Block currently carries a Zacks Rank #3 (Hold). 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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