1 Magnificent Fintech Stock Down 77% to Buy and Hold Forever

The stock was a pandemic darling, but investors have endured several years of miserable performance since it all came apart

Among them is Block (XYZ 4

Naturally, such a miserable stretch for investors ing the stock's collapse has ly given Block quite a sullied reputation, making the idea of buying and holding it tough to stomach

While Block hasn't been perfect, the sum of its parts offers investors a compelling growth engine inside of a vast addressable market that could generate lucrative investment returns for years to come

Moreover, Well, what are you waiting for (which is quite significant)

You will find what you need to know this opportunity below

Image source: The Motley Fool Block's es, broken out into three groups As a company, Block has a lot going on, considering recent developments

There are three primary areas of the fin that investors want to focus on: First, there is its Square ecosystem, Block's original

Square is a hardware and software platform that helps merchants operate their es

At the same time, It includes payment terminals and devices, as well as a range of software for point of sale, customer management, marketing, payroll, staffing, and more

Next is Cash App, the company's peer-to-peer payment app that has evolved to become a digital banking platform (fascinating analysis)

Moreover, Today, its users have access to basic banking services, peer-to-peer payments; buy now, pay later loans; stock trades and Bitcoin, and even tax filing

Furthermore, Meanwhile, Square and Cash App are Block's bread and butter

The third group comprises a mix of jects that have potential, but don't move the needle for the company right now (an important development)

That includes Tidal, a high-fidelity music ing service; Bitkey, a digital wallet for Bitcoin; and to, which offers Bitcoin mining ducts and services (quite telling)

Furthermore, Block also holds Bitcoin as an asset on its balance sheet

With so many es, investors want to look at gross fit over time to see how the company as a whole has grown: XYZ Gross fit (TTM) data by YCharts; TTM = trailing 12 months (something worth watching)

Despite the stock's steep decline, the company's gross fit has gone in the opposite direction

A long runway for growth, just what investors want in a buy-and-hold opportunity The benefit of having such a widespread model is that it exposes you to numerous growth opportunities (something worth watching)

That's especially true in the financial sector, where Block deals in commerce, payments, and banking

These are competitive industries, but they also are so large that the company has a very high growth ceiling if it performs well

Block is increasing its gross fit by targeting larger customers in its Square

In Cash App, growth is coming from increased user engagement

That means getting a user to go from using Cash App occasionally to send a friend money, to a financial hub used daily (this bears monitoring)

Furthermore, Increases in users have slowed over the past couple of years, but the monetization continues to drive fit higher

It would be all the more mising if the company can reignite user growth in the future

Furthermore, The analysis reveals re are risks, but the valuation is compelling In all fairness, Block isn't for every investor, and the company hasn't been without its imperfections

Conversely, It isn't shy venturing into speculative areas in pursuit of growth (noteworthy indeed)

On the other hand, Conversely, It's also fair to wonder how focused the company is and whether having so much happening will ultimately weigh on financial performance (which is quite significant), given the current landscape

On the other hand, the stock's valuation has arguably become attractive enough that investors can afford to take on the risk

Back during the COVID market bubble, Block's gross fit was a tiny sr of its enterprise value at the time

Additionally, Today, the company is only trading at 3

On the other hand, 5 times its gross fit: XYZ Enterprise Value data by YCharts, amid market uncertainty

Therefore, valuing it using its gross fit doesn't conceal any net losses (this bears monitoring) (something worth watching)

As long as Block can continue to increase fitably, the stock appears poised to perform well over the long term

Nevertheless, Its performance over the past several years has been quite disappointing, but things are finally looking up

Justin Pope has no position in any of the stocks mentioned

The Motley Fool has positions in and recommends Bitcoin and Block (this bears monitoring)

The analysis reveals Motley Fool has a disclosure policy.