Is Block the Smartest Investment You Can Make Today?

Core Viewpoint - Block, formerly known as Square, has seen its shares decline over 70% from their peak, despite being a significant player in the financial services and payments industries [1][2]. Company Overview - Block is recognized for its user-friendly financial solutions, particularly through its Square segment for small merchants and Cash App for individual banking needs [4]. - The company has a strong customer base, with over 4 million merchants using Square and 57 million monthly active users on Cash App [5]. Growth Strategy - The growth strategy for both Square and Cash App focuses on acquiring new customers and encouraging existing customers to utilize more products and services, which increases revenue [6]. - Block's total addressable market is substantial, with $130 billion for Square and $75 billion for Cash App, while the company generated $9.4 billion in gross profit over the past year, indicating significant growth potential [7]. Market Sensitivity - The company’s performance is sensitive to macroeconomic conditions, as its target customers are more vulnerable to economic downturns [8]. Bitcoin Involvement - Block is increasingly focusing on Bitcoin, with the cryptocurrency contributing $81 million to gross profit in Q2 2024. The company has introduced features for Bitcoin transactions and holds 8,692 units of Bitcoin on its balance sheet [9][10][11]. - The CEO has emphasized the importance of Bitcoin, suggesting that its integration into Block's offerings will likely increase in the coming years [11]. Valuation - The stock is currently undervalued, trading at a forward price-to-earnings ratio of 20, making it an attractive option for investors looking for exposure to payments and Bitcoin [12].