S&P/ASX 200 Index (ASX: XJO) stock Block Inc (ASX: SQ2) has delivered some outsized gains over the past 12 months despite sliding in early trade today.
Shares in the global buy now, pay later (BNPL) company that acquired Afterpay in January 2022 closed yesterday at $142.80. In morning trade on Thursday, shares are changing hands for $139.50 apiece, down 2.3%.
This sees the ASX 200 stock up 39% since this time last year.
For some context, the benchmark index has gained 10% over this same period.
And according to Shaw and Partners' Jed Richards, Block shares – dual listed on the New York Stock Exchange and the ASX – are well-positioned for more outperformance in 2025 (courtesy of The Bull).
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ASX 200 stock tipped for more gains in 2025
The Block share price really went into overdrive in early October, with shares now up 48% since market close on 3 October.
This sees the ASX 200 stock commanding a market cap of approximately AU$86.5 billion.
And part of its success stems from its 2022 acquisition of Afterpay, which Richards labels one of Australia's best growth stories of the last 10 years.
Richards noted that Block, along with other companies in the BNPL space, delivered fantastic growth when interest rates in most developing nations, including the United States and Australia, were at historic lows.
But when rates began to rise, the capital intensive nature of the sector saw BNPL stocks come under heavy selling pressure.
"The little players didn't survive, and only a handful of BNPL companies still exist," he said.
But interest rates in the US, Europe and many developing nations are starting to come down again. With Australia's RBA likely to follow suit over the coming months.
"The survivors are now moving forward again at a great rate. US consumers were slow to start but are now embracing BNPL transactions," Richards said.
He pointed to Block's fast-growing revenue and his expectations for more growth ahead for his bullish 2025 outlook on the ASX 200 stock.
According to Richards:
In calendar year 2023, Block Inc subsidiary Square generated US$228 billion in payments and is well placed to provide the products required by retailers and restaurants to meet growing demand.
Afterpay has been successfully integrated into Block Inc and the financial results have flourished in the past 12 months. Block revenue was up 25% in calendar year 2023 to US$21.92 billion. In calendar year 2024, we expect higher revenue than in 2023.
