It's Been 44 Months Since Block Stock Set Its All-Time High. Here's 1 Reason to Buy Today.

Core Viewpoint - Block, initially known as Square, has experienced significant volatility since its IPO in November 2015, with a peak growth of 2,060% in August 2021, but has since declined 81% from that high, leading to a pessimistic outlook among investors [1][2][3]. Financial Performance - Block's gross profit surged by 45% in 2020 and 62% in 2021, driven by increased payment volume on its Square platform and user growth in Cash App [4]. - The company announced the acquisition of Afterpay for 29 billion in August 2021, which has been criticized as overly expensive given the stock's subsequent performance [5]. - Although Block's gross profit growth has decelerated, it still maintains double-digit percentage growth, indicating a shift from the previous high growth rates [5]. Investment Opportunity - Current valuation presents a buying opportunity, with Block trading at a forward P/E ratio of 12.2, significantly lower than the S&P 500's 21.1 [6]. - Analysts project Block's EPS to reach 6.32 by 2027, suggesting a current trading multiple of just 8.6 times that forecast, indicating a potential undervaluation [7]. Growth Potential - Block's leadership estimates a total addressable market (TAM) of $130 billion for Square and$75 billion for Cash App, highlighting substantial growth opportunities through new product features and cross-selling [8]. - The company has focused on cost cuts and operational efficiencies, resulting in gross profit growth of 48% over the past two years, outpacing the 21% increase in total operating costs [9]. Conclusion - The current valuation and growth prospects make Block an attractive investment, with a forward P/E ratio of 12 times expected EPS for 2025 [10].