Block (NYSE:SQ) stock is advancing 5% after investment bank Raymond James upgraded its rating on the shares to Outperform from Market Perform in a note to investors earlier today.

Block is a leading player in the fintech space.

Key Metric Expected to Rebound

After researching Block's business, Raymond James expects the growth of the company's Seller Gross Payment Volume (GPV) to accelerate in 2025. More specifically, the bank predicts that the metric will increase at least 10% this year, versus about 8% in 2024.

Among the factors cited by Raymond James for its optimism on this front are an easy comparison, wider distribution of Square's offerings, product enhancements, and the company's move into overseas markets.

Although the bank is less bullish on the company's Cash App business, whose user base is no longer growing significantly,  Raymond James still believes that the product's gross profit can rise going forward.

Calling the valuation of SQ stock attractive, Raymond James placed a $115 price target on the shares. That's well above the shares' current price of about $91.20.

The Performance of SQ Stock

Block has climbed 36% in the last three months, but it has dropped 7% in the last month. In the previous year, it has climbed 36%.

While we acknowledge the potential of SQ, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than SQ but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

READ ALSO 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock

Disclosure: None. This article is originally published at Insider Monkey.

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