• KBW analyst reduced the stock assessment of Block Inc.
• Steven Kwok still sees a potential for SQ to reach $75 per share.
• The stock’s value has dropped more than 25% YTD.

On Monday, Block Inc (NYSE: SQ) saw its stock value decrease after a KBW analyst downgraded the crypto firm citing various “small risks”.

SQ Could yet jump to $75

Steven Kwok now rates the San Francisco-based company behind Cash App at “market perform”. His revised price target of $75, though, still suggests a potential upside of around 10% from its previous close.

The analyst believes that the stock is not as attractive as before due to a multitude of risks. His research note reads:

These major issues revolve around escalating competition in the acquiring industry and the potential for regulatory scrutiny of its Cash App business.

February saw Block Inc report a weaker-than-expected earnings for its fourth financial quarter.

Hindenburg has taken a short position against Block

Kwok is not confident that the company’s income from instant deposits or interchange fees is reliable. He pointed out in his research note that an increase in competition could weigh down on take rates, volume growth, and profitability.

The success of its seller business relies heavily on its in-store offering, and as more products are bought online, this could shift purchase volume to marketplaces and eCommerce-focused platforms, such as Shopify.

In the previous month, short seller Hindenburg Research also targeted the crypto firm, claiming that its Cash App is home to a lot of fake/duplicate accounts, many of which have been used to conduct illegal activities.

As of writing, Block stock has fallen by more than 25% in the YTD period.