Perhaps that title was a bit of an exaggeration, but I am thrilled about the earnings from Block (SQ). If you recall, I recommended Block as a buy a few months ago, and yesterday evening, they released their very encouraging earnings. I will review these earnings and then determine if you should buy whether you are too late, if you should sell, or if waiting is wise. A quick spoiler, I think you should buy.

First, I should go over what Block does. Block is a bit of a complicated company, but they boil down to several key points. First, Block is all about payments. If you know Square, you know Block. The white chip systems are all Block. Many of you reading this are probably paid through one of the Square apps from your employer. Block is everywhere in payments via Square, and that segment is a cash cow. Then, Block is in payments peer-to-peer via Cash App, which is very popular in my age group. Cash App also handles crypto and investing. Then, Block is in crypto. Block used to be named Square, which is why their ticker is SQ, but Jack Dorsey, one of those shroomed-up Silicon Valley CEOs, super loves cryptocurrency. Block has a couple of crypto divisions, and they own a significant amount of Bitcoin. So, that is Block. If you own this stock and check your portfolio day-to-day as I do, you know how volatile this stock is.

So, why did Block have such a great day? Block beat revenue estimates and, most importantly, crushed profits. Block was up 22% in gross profit from a year ago. Growing profit that much in a year is usually pretty solid, but with Block, profits matter even more. With Block, analysts often use profits as the best measure of how the company is doing. Block also had 56 million monthly transactions in December on Cash App, with almost all of those transactions occurring from peer-to-peer interactions and the Cash App Card, which has been growing in popularity. The Cash App business alone reported $1.18 billy in profits, a 25% rise y/y. The Cash App Card also had 23 million actives in December, up 20% and an all-time high.

And Cash App has been laying off so many workers. Cash App is now below 12,000 employees after hundreds, actually maybe thousands, of layoffs. Firing employees like that shows a lot of maturity for a fairly young company. For reasons like those, banks have been revising their Bock ratings to overweight, with Seaport Research Partners writing, "SQ’s progress over the past several months in terms of streamlining itself organizationally, sharpening its focus within its two key businesses Square and Cash App, and becoming hyper-focused on driving profitable growth has been impressive." And critically saying, "We think there [is] more to go.” All of this takes me to my last point and the final question. Is Block stock a buy?

The short answer is yes. The long answer is that Block will continue to grow its business and its profitability. I have been encouraged by their level of maturity and prioritization of shareholder value over wishful long-term goals. I am extremely pleased with my Block position but make no mistake. This position is not for the weak-hearted, and there are many worlds in which this stock is $40 in June. However, I see very few futures where this company is not massively profitable in the future. If you are going to buy into Block, you have to be strong. This is a two to five-year hold, not a position till the end of August. Yes, Block is a buy if you have enough faith in shroomed-up Jack Dorsey.