A Most Promising Little Fintech

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Now, the financial world, as anyone with a passing acquaintance with ledgers and ticker tape will tell you, has been behaving rather like a spirited aunt at a garden party – full of unexpected twists and turns these past few years. Companies, you see, have experienced a most curious phenomenon: a surge in popularity, followed by a rather unceremonious dip as things returned to a semblance of normalcy. It’s all frightfully unsettling for the investor, naturally, leading to a market sentiment that wobbles about like a blancmange.

And amongst this general kerfuffle, one particular fintech concern has found itself in a bit of a pickle. It’s currently trading a good 77% below its peak from August 2021 – a state of affairs that, frankly, seems a bit dashedly uncalled for. Continue reading, and we shall delve into the reasons why this business might just be poised for a rather splendid recovery, before the Wall Street chaps take notice.

A Valuation That’s Rather Attractive, What!

The primary reason this firm deserves a spot on the discerning investor’s list is, quite simply, its valuation. Shares of Block (XYZ 2.80%) are currently sporting an EV-to-EBIT ratio of 15.1 – a figure that, in the current climate of valuation anxieties, is positively beaming. One does rather prefer to acquire assets at a reasonable price, you see, as it provides a most agreeable margin of safety should one’s optimistic predictions about the future prove, shall we say, a trifle exuberant. Allocating capital in this manner is a bit like wearing a sturdy pair of boots – it minimizes the risk of an unpleasant stumble.

Block, you see, is a growing and profitable establishment. The Square division posted a respectable 9% year-over-year increase in gross profit during the third quarter. Cash App, with its impressive 58 million monthly active users, saw gross profit rise at an even more encouraging 24% during the same period. And the company’s operating income has been positively soaring – a truly heartening sight, what!

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Bitcoin: An Underappreciated Asset, By Jove!

The main offerings of Square and Cash App, naturally, garner most of the attention from the investment community. As a result, the company’s Bitcoin (BTC 1.86%) initiatives are often overlooked – a most unfortunate oversight, in my humble opinion. Investors with a keen eye for opportunity should certainly pay attention.

I firmly believe Bitcoin presents Block with a rather underappreciated upside. CEO Jack Dorsey has been publicly bullish on Bitcoin since 2021, a conviction stemming from the view that the internet requires a native currency. By being digital, decentralized, and scarce, Bitcoin is, in his estimation, the most suitable candidate for the role. A rather clever notion, don’t you think?

Block’s Bitcoin projects are remarkably diverse. The company sells a Bitcoin self-custody wallet called Bitkey. It offers a range of cryptocurrency mining equipment under the Proto moniker. Cash App users can trade Bitcoin with ease. And Square sellers are now able to accept Bitcoin payments – a truly forward-thinking initiative, what!

Should Bitcoin’s price begin to rise with a bit of gusto, it could lead to a rapid and positive shift in market sentiment. The investment community might start to view Block as an even more innovative enterprise, better positioned than its peers when it comes to Bitcoin. At that point, the valuation might become decidedly less attractive – so one ought to act with a degree of promptitude, wouldn’t you agree?

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2026-02-02 00:52