Block (XYZ): Weak Earnings, Bitcoin Exposure, and the Next Move

📊 Fundamental Overview


I entered Block (XYZ) about a year ago when the company’s cash flow trends were very strong.
However, right now the picture is becoming more concerning.

• EPS growth is not stable.
  Previously, EPS was growing rapidly (65%, 38%, 155%), but the last two quarters showed only –10% and +13% growth.
  
  
• Revenue growth stagnated.
  Year-over-year revenue used to grow strongly —
  2019: $4M → 2020: $9M → 2021: $17M → 2023: $21M → 2024: $24M — but is now roughly flat (~+1% YoY).
  
  
• Forward P/E: ~22.7 — not particularly attractive considering the company’s decelerating fundamentals.
  
  
• Share dilution stopped.
  Since 2022, Block has halted share issuance, and total shares outstanding remain stable within ±2%, which is a positive signal compared to other fintech peers.
  

💥 Q3 Earnings Miss
In the latest earnings report:

• Expected EPS: $0.63 → Actual: $0.54
  
• Revenue: $6.11 B (below expectations)
  

The miss triggered a 15–18% drop after earnings, followed by a partial rebound as dip buyers stepped in.
But fundamentally, the company is clearly losing growth momentum.

₿ Bitcoin Exposure Risk
Block currently holds about 8,700 BTC (~$1 billion) on its balance sheet.
While this gives long-term upside potential, it also adds massive volatility risk.

If Bitcoin enters a –70% correction (which I expect in the next 3–4 months), that could hit Block’s balance sheet hard and accelerate the drawdown.

📈 Technical Structure
Technically, the stock has already corrected about –86% from its all-time high.
We’re currently sitting inside a major accumulation cluster between $50–80 — a very strong volume node.

If this cluster breaks down, the next major support zone is $8–15, which would imply a potential –90%+ drawdown, typically a “pre-bankruptcy” level of decline.


After the latest earnings report, XYZ dropped by nearly 18%, forming a noticeable gap down. However, the volume on this sell-off was relatively low compared to the massive volume spikes seen in July 2025.
Typically, such sharp post-earnings drops come with high capitulation volume, signaling panic selling and potential bottom formation, but this time, that confirmation is missing.
This raises the risk that the current decline might not yet be over, and that smart money may still be waiting lower, around the next demand zone.


From a wave-structure perspective, it looks like wave 1 is complete, followed by a sharp corrective move that has already exceeded the typical 38–62% retracement range, falling by about 86%, an unusually deep correction, but not impossible within a prolonged cycle.
The ongoing consolidation phase has lasted significantly longer than previous ones, which increases the probability of a final downward push, forming a classic zigzag pattern (A–B–C), a drop, consolidation, and one more leg down to complete seller capitulation.
Volume patterns in such structures usually peak in the middle of the formation, aligning with current price behavior.

Technically, both outcomes remain open,
we could see a short-term bounce from this zone or a double zigzag (dZ) structure unfolding lower before the true bottom forms.
Upside momentum currently lacks fuel, fundamentals don’t support a strong rally yet.

If price breaks above $100, the next upside target sits around $280, offering roughly 4× potential from current levels.

So the setup remains binary, either accumulation continues before reversal, or we break down further in sync with BTC weakness.

⚠️ Risk View

• Fundamental growth has stalled.
  
• Earnings miss raises red flags.
  
• Bitcoin exposure magnifies downside risk.
  
• If price breaks below $32–30, that would confirm a breakdown, potential free-fall to $8–15.
  

On the positive side, the company stopped share dilution, maintains good liquidity, and still has strong brand power in fintech.

🧩 My Position
I currently hold a protected position (protective puts) till march 2026, limited downside, but I’m considering a full exit.
There’s no visible fuel for strong upside, and with BTC risk rising, the short-term picture remains shaky.

If we see capitulation into the $30–40 range with BTC bottoming, that could be a smart-money accumulation zone again.

🔑 Key Levels

• $100 → breakout confirmation, opens path to $280
  
• $50–80 → main accumulation cluster
  
• $32–30 → invalidation / stop-loss zone
  
• $8–15 → next major demand zone if breakdown continues
  

🧭 Summary
Block’s fundamentals are slowing, its Bitcoin exposure is a double-edged sword, and technically we’re at a critical level.
If BTC corrects sharply, Block could retest the $30–40 area or even lower, but if it holds and reverses above $100, the next bull wave could be massive.

At this stage, risk management and patience are key.