Is Block Stock Undervalued?
Consumer reliance on digital products has been a constant theme of the coronavirus pandemic. Corporations are increasingly using e-signature platforms offered by DocuSign or Adobe, while videoconferencing tools offered by companies like Zoom Communications have facilitated communication in a stay-at-home environment. Also comprising the ever-growing digital web are financial services like payments and investing.
Despite robust revenue growth and impressive suite of products, Block (NYSE: SQ) stock is down roughly 26% over the last month. Although the stock is already experiencing some valuation compression as technology stocks enter correction territory, some investors may still be wary of the investments that Block has made over the last 12 months. Let's dig in and find out if Block is building the foundation to a leading payments platform.
In December of last year, digital-payments company Square rebranded as Block. This may have occurred because the company benefited greatly from the rising enthusiasm of crypto during the pandemic. Block generated less than $1 million in Bitcoin revenue in 2019, which surged to $4.6 billion in 2020. Through the first nine months of 2021, Bitcoin revenue has continued to gain steam as the company generated $8.1 billion in Bitcoin revenue. It might be reasonable for investors to have assumed that the rebrand to Block was a nod to crypto and the blockchain technology on which it operates.
Source Fool.com
