The Newest Stock in the S&P 500 Has Soared 510% Since Its 2015 IPO, and It's a Buy Right Now, According to Wall Street

Block (NYSE: XYZ) has been added to the S&P 500, marking a significant milestone for the fintech pioneer and one of only six companies to join the index in 2025. This inclusion follows the company's historical outperformance, generating 510% gains since its IPO compared to the S&P 500's 206%, and solid Q1 results, which saw revenue grow 8% and adjusted EPS increase 19%. Despite some investor concern over gross profit and earlier guidance adjustments, Wall Street remains largely bullish, with 75% of analysts rating the stock a 'buy' or 'strong buy,' citing its expanding ecosystem and attractive valuation.

Analysis

Block's inclusion in the S&P 500 is a significant corporate milestone, validating its position as a market leader and guaranteeing structural demand from index-tracking funds. This development is supported by strong historical performance, with the stock generating 510% in gains since its 2015 IPO, far outpacing the S&P 500's 206%. Despite a broader environment of economic uncertainty that led the company to lower its guidance earlier in the year, its first-quarter results demonstrated resilience. Excluding Bitcoin, revenue grew 8% year-over-year to $3.47 billion, while operating income rose 32% and adjusted EPS increased 19%. Key performance indicators remain robust, with gross payment volume (GPV) up 7.2% and Cash App's gross profit per monthly active user growing 9%. While investors reacted negatively to gross profit figures, Wall Street sentiment remains overwhelmingly bullish, with 75% of 47 analysts rating the stock a buy or strong buy. This confidence is underpinned by an attractive valuation, with the stock trading at 19 times trailing earnings, and analyst expectations for continued improvement toward achieving the 'Rule of 40'. Furthermore, Block's significant Bitcoin holdings, now worth approximately $1.03 billion on a $261 million cost basis, represent a material asset with the potential for both substantial upside and volatility.

Key Decisions for Investors

• The inclusion in the S&P 500 provides a technical tailwind from mandatory index fund buying, which, coupled with a strong analyst consensus and a valuation of 19x trailing earnings, may represent a favorable entry point for long-term investors.
• Investors should closely monitor gross profit growth and any revisions to corporate guidance, as these were key points of concern following the Q1 report and are critical to justifying the bullish outlook.
• Acknowledge the company's significant exposure to Bitcoin, which introduces a material source of price volatility that is distinct from the performance of its core payments business.
• Consider the company's progress toward achieving the 'Rule of 40' as a key metric for gauging management's ability to successfully balance high growth with increasing profitability in a competitive landscape.