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Block's (SQ) Square Expands Its Offerings for Restaurants

Block’s SQ Square has enhanced its offerings for restaurants via the Square for Restaurants platform.

The company launched Square KDS (kitchen display system) on Android, allowing kitchen staff to view incoming orders more efficiently. Further, restaurants can customize Square KDS to fit their workflow and streamline the ordering process.

Notably, Square KDS is available on Play Store.

In addition, the company unveiled Square for Franchises, which offers an integrated solution for quick-service franchises to manage multiple locations effectively and identify new revenue streams.

Further, the Square for Franchises dashboard, which provides a full picture of store performance and exact control over customized menu items, as well as gift card and loyalty program orchestration, allows franchisors to manage multiple locations easily.

We believe the latest move will aid Square in gaining strong momentum among restaurants. Also, it will likely aid the performance of Square’s food and beverages business in the days ahead.

Block, Inc. Price and Consensus

Block, Inc. Price and Consensus
Block, Inc. Price and Consensus

Block, Inc. price-consensus-chart | Block, Inc. Quote

Efforts to Bolster Square for Restaurants

The introduction of Square KDS and Square for Franchises is in sync with Block’s growing efforts toward bolstering Square for Restaurants. Recently, Square formed several partnerships to enhance its offerings.

The Paytronix integration allows restaurants to seamlessly integrate Paytronix Online Ordering and Loyalty with Square for Restaurants.

Further, Square partnered with Flash Order and Soundhound to help sellers efficiently process drive-through orders.

Additionally, Square's integration with OpenTable enables restaurants around the world to speed up operations, simply and efficiently manage their dining rooms, and gain improved visibility into table turnaround times and diner reservation data.

Growth Prospects

All the abovementioned endeavors are likely to contribute well to Block’s Gross Payment Volume (GPV) in the near term.

Notably, Square’s food and beverages segment has experienced 47% year-over-year growth in upmarket GPV. Also, the company witnessed 38% year-over-year increase in paying subscribers base of the Square for Restaurants platform.

Moreover, these efforts position Block well to capitalize on the growth prospects present in the global restaurant management software market and food and beverages market.

According to a report from Grand View Research Company, the global restaurant management software market is expected to witness a CAGR of 16.3% between 2023 and 2030.

Per a report from IndustryARC, the global food and beverages market is expected to reach $7,464.2 billion by 2027, witnessing a CAGR of 5.9% between 2022 and 2027.

A report from The Business Research Company states that the global food and beverages market is expected to reach $9,225.3 billion at a CAGR of 6.3% between 2023 and 2027.

We believe that Square’s growing footprint in this promising market will help it win investors’ confidence in the days ahead.

Coming to the price performance, SQ has declined 11.7% in the year-to-date period against the industry’s rise of 3.7%.

Zacks Rank and Stocks to Consider

Currently, Block carries a Zacks Rank #3 (Hold).

Investors interested in the broader Zacks Computer & Technology sector can consider some better-ranked stocks like Ciena CIEN, DigitalOcean DOCN and AMETEK AME. Ciena, DigitalOcean and AMETEK each carry a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Ciena shares have lost 14.9% in the year-to-date time frame. The Zacks Consensus Estimate for CIEN’s fiscal year 2023 earnings is pegged at $2.81 per share, suggesting an increase of 47.9% from the prior year’s reported figure.

DigitalOcean shares have risen 27% in the year-to-date period. The Zacks Consensus Estimate for DOCN’s 2023 earnings is pegged at $1.66 per share, suggesting a jump from 94 cents per share reported in the prior year.

AMETEK shares have rallied 3.4% year to date. The Zacks Consensus Estimate for AME’s 2023 earnings is pegged at $6.06 per share, suggesting an increase of 6.7% from the prior year’s reported figure.

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