How Time Re-Rates Block Stock’s Demanding Price Tag

The fintech looks expensive on paper, but its valuation shrinks sharply on future earnings, if you believe the growth story that gets it there.

At first glance, Block (XYZ) stock looks expensive. Trading at about 59.2 times the last twelve months of reported earnings, it carries the kind of premium that often stops an investor’s analysis cold. But the real question isn’t the price tag today. It’s whether the growth analysts expect to arrive over the next two years justifies it.

The market’s view of a stock’s valuation is rarely static, and for a company like Block, the contrast between peer valuations can be instructive. For a deeper look at a key competitor, you can read more about the current debate over PYPL stock.

What Patience Buys You

Here is how the math changes for a patient holder. While the trailing multiple is high, the picture shifts when you look forward. Based on the earnings analysts expect by 2027, today’s share price of about $79.99 is only about 17.2 times those future earnings. That’s a 71% lower multiple, a steep discount that materializes simply by earnings growing into the current price. In effect, you are not paying 59.2 times for the business you will own in two years; you are paying 17.2 times. The stock’s multiple drops below 25 times earnings around 2026, reaching a more conventional level long before that second year arrives.

And Block is far from alone: which 10 S&P 500 stocks carry the biggest hidden forward discount? Our rankings sort the entire index by how little you are really paying for each name’s growth once the out-year earnings land.

The Growth That Must Arrive

This forward valuation discount is only as real as the growth that creates it. The honest question is whether that growth is believable. Analyst consensus assumes Block’s revenue will grow about 8.7% a year for the next two years. That’s a significant acceleration from the 2.3% revenue growth the company actually delivered over the last twelve months, though it is closer to the most recent quarter’s 4.9% growth.

So, what gives analysts confidence? On its latest earnings call, management pointed to an increase in development speed, noting that “Production code changes per engineer increased more than 2.5x from January to April” thanks to new AI tools. This is meant to fuel faster rollouts of newer products, one of which is “on track to reach all Square sellers in June,” and drive accelerating growth in both its Cash App and Square ecosystems. Crucially, management’s own guidance corroborates the near-term optimism. Analysts expect about $3.9 per share in earnings for 2026, which is right in line with the company’s own raised guidance for $3.85 in adjusted diluted EPS.

The Margin of Safety and the Reward

A stock priced for this kind of growth can be volatile. In past market shocks, Block has fallen as much as 69% from peak to trough, a reminder that the discount rewards patience rather than guaranteeing a smooth ride.

It is critical to understand what the discount does, and does not, imply for your return. If the stock price never moves from today’s level, by 2027 you would simply own a company trading at 17.2 times earnings. This proves you did not overpay; it is your margin of safety. The actual reward only comes if the market continues to award the stock a higher multiple as those earnings arrive. For instance, if the multiple settles at about 38.2 times, halfway between today’s premium and that floor, the stock would be worth about $177. That implies a 122% gain from today’s price.

The Real Price of Growth

The premium you see on Block stock today is not the price you are really paying if you hold for the long term. On out-year earnings, that same price represents an ordinary multiple, providing a cushion. The upside is conditional: if the market keeps paying anything near today’s multiple as those earnings actually arrive, the price compounds with them. To gauge whether the plan is on track, watch for continued acceleration in Square’s gross profit growth. It leaves you wondering how many other premium stocks are this reasonably priced once you look a few years out.

Own The Growth Without Overpaying

Whether you already hold Block or you are weighing it now, the appeal is not that the stock is secretly cheap today. It is that you are not overpaying for the growth: on the earnings analysts expect two years out, you are paying an ordinary multiple, even if the price never moves.

The upside sits on top of that. If the market keeps paying anything close to today’s multiple as those earnings actually arrive, the price compounds with them. The one catch is that it all rides on a single company’s numbers coming through. And if it is exposure to financials as a whole you want rather than this one name, our ETF Scorecard ranks the financials funds, though any single one still leaves you riding a single slice of the market. That is why the Trefis High Quality (HQ) Portfolio does not lean on any single name: it uses this same valuation-discount discipline to size a measured allocation to strong growth like this, inside a diversified set of 30 high-conviction stocks, rebalanced as the estimates change and with a track record of outpacing a benchmark that combines the three major indices – the S&P 500, S&P Mid-cap, and Russell 2000.