Financial Analysis: Block (NYSE:XYZ) and Riskified (NYSE:RSKD)

Block (NYSE:XYZ) and Riskified (NYSE:RSKD) are both computer and technology companies, but which is the superior stock? We will compare the two companies based on the strength of their earnings, institutional ownership, risk, analyst recommendations, valuation, dividends and profitability.

Analyst Ratings

This is a summary of current ratings and price targets for Block and Riskified, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Block	1	6	27	3	2.86
Riskified	1	3	3	0	2.29

Block presently has a consensus target price of $84.94, suggesting a potential upside of 20.26%. Riskified has a consensus target price of $5.96, suggesting a potential upside of 24.78%. Given Riskified’s higher possible upside, analysts clearly believe Riskified is more favorable than Block.

Valuation and Earnings

This table compares Block and Riskified”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Block	$24.19 billion	1.74	$1.31 billion	$1.28	55.18
Riskified	$344.64 million	2.05	-$27.57 million	($0.11)	-43.41

Block has higher revenue and earnings than Riskified. Riskified is trading at a lower price-to-earnings ratio than Block, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Block and Riskified’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Block	3.30%	7.02%	3.99%
Riskified	-5.17%	-3.91%	-2.89%

Risk and Volatility

Block has a beta of 2.57, meaning that its share price is 157% more volatile than the S&P 500. Comparatively, Riskified has a beta of 1.39, meaning that its share price is 39% more volatile than the S&P 500.

Institutional and Insider Ownership

70.4% of Block shares are held by institutional investors. Comparatively, 59.0% of Riskified shares are held by institutional investors. 11.4% of Block shares are held by insiders. Comparatively, 17.4% of Riskified shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Summary

Block beats Riskified on 12 of the 15 factors compared between the two stocks.

About Block

Square, Inc. provides payment and point-of-sale solutions in the United States and internationally. The company's commerce ecosystem includes point-of-sale software and hardware that enables sellers to turn mobile and computing devices into payment and point-of-sale solutions. It offers hardware products, including Magstripe reader, which enables swiped transactions of magnetic stripe cards; Contactless and chip reader that accepts EMV® chip cards and Near Field Communication payments; Chip card reader, which accepts EMV® chip cards and enables swiped transactions of magnetic stripe cards; Square Stand, which enables an iPad to be used as a payment terminal or full point of sale solution; and Square Register that combines its hardware, point-of-sale software, and payments technology, as well as managed payments solutions. The company also provides Square Point of Sale software; Cash App, which provides access to the financial system, allowing customers to electronically send, store, and spend money; Caviar, a food ordering platform for restaurants to offer food ordering, pickup and delivery, to their customers; and Square Capital that facilitates loans to sellers based on real-time payment and point-of-sale data. Square, Inc. was founded in 2009 and is headquartered in San Francisco, California.

About Riskified

Riskified Ltd., together with its subsidiaries, develops and offers an e-commerce risk management platform that allows online merchants to create trusted relationships with consumers in the United States, Europe, the Middle East, Africa, the Asia-Pacific, and the Americas. It offers Chargeback Guarantee that ensures the legitimacy of merchants' online orders; Policy Protect, a machine learning solution designed to detect and prevent refund and returns policy abuse in real-time; Account Secure, a solution that cross-checks every login attempt; Dispute Resolve, which is used to compile submissions for fraud and non-fraud related chargeback issues; and PSD2 Optimize that helps merchants avoid bank authorization failures and abandoned shopping carts. The company serves direct-to-consumer brands, online-only retailers, omnichannel retailers, online marketplaces, and e-commerce service providers in various industries, such as payments, money transfer and crypto, tickets and travel, electronics, home, and fashion and luxury goods. Riskified Ltd. was incorporated in 2012 and is headquartered in Tel Aviv, Israel.