Block (NYSE: XYZ) was once a high-flying stock. In the five years leading up to their peak in August 2021, shares were up an astonishing 2,430%. Growth was fantastic, and the market was warming up to this innovative financial services business.
It’s been a disappointing story since that peak. As of July 14, this fintech stock traded 76% below the record, with a 21% decline just this year. The growth has slowed, to be sure, but Block’s profits have been soaring. And the stock now trades at a compelling forward price-to-earnings ratio of 24.7.
Should you buy shares right now and hold them for 20 years? The answer depends on one crucial factor that’s becoming more important to Block’s business.