Australian TMT: Transfer of coverage

Research evidence excerpt

Australian TMT: Transfer of coverage

Benjamin Jones AC Asia Pacific Equity Research

(61-2) 9003-8627 31 July 2026 J P M O R G A N

benjamin.s.jones@jpmorgan.com

Investment Thesis, Valuation and Risks

Block - AU (Overweight; Price Target: A$140.00)

Investment Thesis

Block (Square at the time) pioneered micro-merchant card acceptance in 2009, much like

PayPal did for online payment years ago, and has evolved to be the scale leader in the popular

software-based POS revolution. Prior to Block, micro and casual merchants rarely accepted

in-person card-based payments, as mobile terminals offered by traditional POS technology

providers were too costly, and banks were generally unwilling to underwrite merchant bank

accounts for casual sellers. In just 10 years, Block has grown to ~$200bn+ in annualized card

volume, serving ~4 million active sellers. It has also developed Cash App, one of the largest

consumer Fintechs in the U.S., with over 50M active users and strong engagement

especially in the younger demographic. These two ecosystems create a unique opportunity

to synergize the acquisition of Afterpay, a BNPL leader with a global presence that provides

a nice overlay for Block, filling geographic, user and commerce gaps. We rate shares

Overweight given Block’s large and untapped addressable market, unique growth

characteristics, and an equally unique mission and corporate culture.

Valuation

Our A$140 price target for Block - AU is simply an AUD currency translation of our USD

price target. Our Dec 2026 price target of $100 applies a ~4x multiple on our CY27E gross

profit, which implies ~12x our CY27E SBC-burdened EBITDA or 10x ex-SBC. This

multiple is a discount to XYZ’s three-year average NTM EBITDA multiple (~14x). We find