Can Block Stock Recover If Markets Fall?
Block (XYZ) stock is down 13.9% in 21 trading days. The recent slide reflects renewed concerns around slowing payment volume growth and rising fintech competition, but sharp drops like this often raise a tougher question: is the weakness temporary, or a sign of deeper cracks in the story?
Before judging its downturn reslience, let’s look at where Block stands today.
- Size: Block is a $37 Bil company with $24 Bil in revenue currently trading at $61.04.
- Fundamentals: Last 12 month revenue growth of 0.5% and operating margin of 9.6%.
- Liquidity: Has Debt to Equity ratio of 0.18 and Cash to Assets ratio of 0.35
- Valuation: Block stock is currently trading at P/E multiple of 14.1 and P/EBIT multiple of 21.5
- Has returned (median) 17.5% within a year following sharp dips since 2010. See XYZ Dip Buy Analysis.
These metrics point to a Moderate operational performance, alongside Low valuation – making the stock Attractive. For details, see Buy or Sell XYZ Stock
That brings us to the key consideration for investors worried about this fall: how resilient is XYZ stock if markets turn south? This is where our downturn resilience framework comes in. Suppose XYZ stock falls another 20-30% to $43 – can investors comfortably hold on? Turns out, the stock has fared worse than the S&P 500 index during various economic downturns, based on (a) how much the stock fell and, (b) how quickly it recovered. Below, we dive deeper into each such downturn.
- From Roomba Pioneer to Bankruptcy: What Went Wrong at iRobot?
- Vertiv Stock: Betting on Power and Heat In The AI Era
- Micron Stock: Up 170% And Still Cheap?
- Why On Earth Is SpaceX Worth $800 Billion?
- The Next Big Rally in Ford Motor Stock Could Start Like This
- The Risk Factors to Watch Out For in NVIDIA Stock
2022 Inflation Shock
- XYZ stock fell 86.1% from a high of $281.81 on 5 August 2021 to $39.22 on 30 October 2023 vs. a peak-to-trough decline of 25.4% for the S&P 500.
- The stock is yet to recover to its pre-Crisis high
- The highest the stock has reached since then is $98.92 on 4 December 2024 , and currently trades at $61.04
| XYZ | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -86.1% | -25.4% |
| Time to Full Recovery | Not Fully Recovered | 464 days |
2020 Covid Pandemic
- XYZ stock fell 55.6% from a high of $85.70 on 20 February 2020 to $38.09 on 20 March 2020 vs. a peak-to-trough decline of 33.9% for the S&P 500.
- However, the stock fully recovered to its pre-Crisis peak by 2 June 2020
| XYZ | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -55.6% | -33.9% |
| Time to Full Recovery | 74 days | 148 days |
2018 Correction
- XYZ stock fell 48.8% from a high of $99.01 on 28 September 2018 to $50.72 on 24 December 2018 vs. a peak-to-trough decline of 19.8% for the S&P 500.
- However, the stock fully recovered to its pre-Crisis peak by 22 June 2020
| XYZ | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -48.8% | -19.8% |
| Time to Full Recovery | 546 days | 120 days |
Feeling jittery about XYZ stock? Consider portfolio approach.
Portfolios Beat Stock Picking
Individual stocks are unpredictable. A smart portfolio keeps you invested, limits downside shocks, and provides upside exposure
The Trefis High Quality (HQ) Portfolio, with a collection of 30 stocks, has a track record of comfortably outperforming its benchmark that includes all 3 – the S&P 500, S&P mid-cap, and Russell 2000 indices. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride, as evident in HQ Portfolio performance metrics.