Modern credit methods including Square, Visa, Master Card, American Express and Discover II

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Shares of payments giant Block (NYSE:SQ), formerly known as Square, would fare better if bitcoin (BTC-USD) wasn’t in the picture, Mizuho analyst Dan Dolev wrote in a note Thursday.

“SQ’s over-association with Bitcoin is a shame,” Dolev said.

The analyst has lowered his price target on Block (SQ) to $135 per share from $215, still implying 78% upside from Thursday’s close. He also reiterated his Buy rating. Shares of SQ jumped 6.4% on Thursday.

Bitcoin (BTC-USD) only accounts for less than 5% of Block’s (SQ) gross profit, so the cryptocurrency shouldn’t be driving overall sentiment, the note said. But “tagging SQ as a ‘crypto stock’ has prevented the stock from benefiting from strengthening fundamentals, Dolev explained.

Meanwhile, Dolev said Block’s (SQ) fundamental’s are strong, as user engagement on its Cash App hit a record in March. And stripping out bitcoin (BTC-USD) from the mix, Block’s gross profit is climbing on both two-year and three-year bases. But in Q1, Block’s gross profit of $43M declined from $46M in Q4 2021.

Looking at the chart here, it’s clear that bitcoin (BTC-USD) -45% has a positive correlation with Block (SQ) -65% stock over the past year.

Take a look at SA contributor Stone Fox Capital’s bullish take on Block.

Earlier, Block shares perked up after several rough months.

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