1 Growth Stock Down 77% to Buy Right Now
When it comes to fintech stocks, Block (NYSE: SQ) is one of the best-known companies in the public markets, although more may know it by its former name, Square. What began as a company with a simple device that could be plugged into the headphone jack of a smartphone to accept credit card payments has blossomed into a $37 billion company with dozens of products and services in a little more than a decade.
Unfortunately for the company and its shareholders, Block has had a rough year, with shares down more than 77% from their mid-2021 high. The question investors need to answer is whether that drop in share price is warranted based on business performance or merely a consequence of the broader sell-off that has led to the current bear market. Let's dive into why Block presents a buying opportunity for investors right now.
In the first quarter of 2022, Block reported $1.3 billion in gross profit. Of that amount, $661 million was attributable to the Square ecosystem. The Square reader was the original product when the company was formed and has developed a software-based ecosystem that supports sellers in every facet of their business. Square's gross profit in the quarter represented a 41% increase year over year and a two-year compound annual growth rate (CAGR) of 36%. This is strong growth that shows the continuing market penetration and increased spending of existing users.
Source Fool.com