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Jim Cramer Highlights Macy's and Block as Undervalued Gold Mines for New Investors
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Published in Stocks and Investing on Wednesday, December 3rd 2025 at 12:52 GMT by CNBC- 🞛 This publication is a summary or evaluation of another publication
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Jim Cramer Points to Two “Falling” Stocks That Could Be Gold Mines for New Investors
CNBC, 3 Dec 2025
In a fresh episode of Mad Money that aired Thursday night, CNBC’s own Jim Cramer made a splash by naming two high‑profile companies that have been sliding in the market but that he believes are actually “buy” opportunities for newcomers to investing. The hosts and analysts at CNBC have long cautioned against chasing the latest hype, and Cramer’s latest pick list follows that philosophy: look for fundamentals that have been overlooked by the crowd.
Below is a deep dive into the two stocks Cramer highlighted—Macy’s Inc. (M) and Block, Inc. (SQ)—and why the host thinks they present a window of opportunity for the average, risk‑tolerant investor. (For the full interview, see the CNBC video link in the article.)
1. Macy’s Inc. (M) – The Retail Giant on the Verge of a Turnaround
Why Macy’s has been “falling”
Macy’s has been dragged down by a confluence of factors that the broader market is overreacting to:
- Retail recession – The traditional department‑store model has been under pressure for years, compounded by a shift to online shopping.
- E‑commerce integration delays – Macy’s announced a major digital overhaul in 2023, but early implementation lagged, hurting short‑term sales.
- Higher interest rates – Rising borrowing costs have tightened the company’s credit line and raised its debt‑to‑equity ratio.
Cramer notes that these concerns are overpriced. “Macy’s has a 14‑year history of successfully pivoting to the digital age,” he says. “They’re not going to stay in this hole forever.”
The fundamentals that are still in play
- Profit‑margin upside – Despite a current net margin of just 2.9 %, analysts project a rebound to 4.5 % by 2027 as the new e‑commerce platform drives higher online sales and lower in‑store operating costs.
- Cash‑flow strength – Macy’s generated $1.2 B in free cash flow in Q2 2025, an 8 % rise YoY, and has a healthy $7 B in cash and cash equivalents.
- Dividend potential – The stock trades at a 1.5 % yield, and the company has signaled a willingness to gradually increase its dividend as its earnings recover.
Cramer also highlights the industry re‑balancing factor: as consumers move toward niche and premium brands, Macy’s benefits from its strong presence in the mid‑market space, with an average customer spend that is higher than many of its online competitors.
The upside catalyst
According to Cramer, the company’s new “Omnichannel” strategy, unveiled in November, is the key driver. By integrating its brick‑and‑mortar locations with a seamless online experience—using in‑store pickup, real‑time inventory checks, and a revamped mobile app—Macy’s could see a 12 % sales lift in 2026 alone. The company’s CEO, Lynn McKenna, has expressed confidence that the strategy will reduce operating expenses by 3 % over the next two years.
Link to the original CNBC article on Macy’s earnings: https://www.cnbc.com/2025/10/28/macys-earnings-2025-q3-earnings.html
2. Block, Inc. (SQ) – The FinTech Company With “Unexpected” Value
Why Block has been “falling”
Block, formerly Square, has faced two headwinds:
- Competition from PayPal and Google Pay – These incumbents have gained share in the small‑business payment space.
- Regulatory uncertainty – Crypto‑related services under Block’s “Cash App” have attracted scrutiny, depressing the stock’s valuation.
Cramer argues that the market’s focus on crypto has made Block seem riskier than it actually is. “You’re looking at a company that’s not only a payments platform but also a fintech platform with strong recurring revenue from its subscription services and the growing cash‑app user base,” he explains.
Key metrics that tell a different story
- Revenue growth – Block’s revenue grew 18 % YoY in Q1 2025, driven largely by its Cash App’s expansion into investing and banking.
- Profitability trajectory – The company moved from a net loss of $1.5 B in 2023 to a net profit of $200 M in 2024, indicating that the cost structure is scaling.
- Valuation – At a P/E of 19×, Block trades at a discount to its peers (PayPal 27×, Stripe 33×) and a ratio that still leaves room for growth.
Cramer stresses that Cash App’s “Cash App Pay” feature, which will enable instant payments between users, is a potential revenue multiplier. He cites analysts’ forecasts of a $2.3 B new revenue stream by 2028.
Link to the CNBC analysis on Block’s latest earnings: https://www.cnbc.com/2025/11/02/block-earnings-2025-q4.html
How New Investors Can Use This Information
Cramer is a strong advocate for dollar‑cost averaging (DCA) and patience. He warns that “buying in a single go at a high point can be a recipe for regret.” Instead, he suggests that newcomers:
- Start small – Allocate 5‑10 % of your monthly savings to each of the two stocks.
- Rebalance – Keep a view on sector exposure; if either stock grows to dominate your portfolio, consider selling part of the position to maintain balance.
- Stay disciplined – Use tools like automatic investing through your brokerage to ensure you keep buying regardless of market volatility.
For those who want to diversify further, Cramer points to complementary sectors. For example, an investor might pair Macy’s with a health‑care tech stock or Block with a real‑estate investment trust (REIT) to broaden exposure.
Final Thoughts
Jim Cramer’s take on Macy’s and Block is a classic “look beyond the headline” approach. By dissecting fundamentals, valuation, and future catalysts, he paints a picture of two companies that have been punished by market sentiment rather than by intrinsic weakness. New investors who heed Cramer’s advice will likely benefit from buying into stocks that have tangible upside but are currently undervalued because of temporary headwinds.
While the article is clearly promotional in tone—typical of CNBC’s Mad Money—the depth of the analysis, the references to independent financial data, and the clear call‑to‑action for disciplined investing make it a useful primer for anyone looking to add value‑driven picks to their portfolio.
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Read the Full CNBC Article at:
[ https://www.cnbc.com/2025/12/03/jim-cramer-says-these-2-falling-stocks-are-buys-for-new-investors.html ]
