What happened

Shares of Block (SQ -2.76%) climbed 12.8% in November, following a strong earnings announcement. However, it lost some of those gains later in the month as fintech stocks and cryptocurrencies hit a rough patch.

So what

Block impressed investors, as its third-quarter results beat Wall Street's estimates. The fintech disruptor delivered strong results in both of its major business segments.

Gross profit increased more than 50% for its Cash App segment. That's impressive progress for a consumer-facing platform that offers transfer, digital payment, and investment services. Slowing economic growth, inflation, and difficult capital markets are all challenges for Cash App, but that service has been resilient.

Square, Block's payment-processing and analytics platform, also reported an impressive 30% increase in gross profit. Square is popular among small- and medium-sized businesses that offer goods and services to consumers, so investors were justifiably concerned that difficult economic conditions would jeopardize the segment's operations.

Person swiping a credit card through a mobile card reader attached to a mobile device.

Image source: Getty Images.

Unfortunately, there's a lot more going on in this story. Block has leaned heavily into the disruptive potential of cryptocurrencies and blockchain technology, which founder and CEO Jack Dorsey believes will transform fintech. That might prove to be a shrewd long-term bet but is creating turbulence right now.

Block holds more than $150 million in Bitcoin, so the stock tends to follow any big movements in Bitcoin's price. Even though that's a relatively small portion of the company's balance sheet, investors still associate the stock with cryptocurrencies. As news broke about the FTX crisis, negativity seeped into digital-token markets, and Block suffered, as well.

Now what

Block is down more than 60% year to date. It soared high in 2021, along with other growth stocks and cryptocurrency assets, but rising interest rates and dwindling investor risk appetite have fueled a serious collapse. Block's forward price-to-earnings ratio (P/E) is under 40, which is among the cheapest levels in its history. It might be too cheap for growth investors to ignore.

The company has proven itself a fintech innovator multiple times. It has positioned itself to maintain a leadership role in every facet of next-generation finance for both consumers and small businesses. It has diversified revenue streams, and all of them seem to be growing quickly. Even if there are bumps in the road due to a weak economy over the next few months, this company is a strong candidate to deliver big returns for long-term investors.

Block could also be a compelling buy for investors who want crypto exposure but don't like the speculation involved in buying digital tokens outright. This stock is likely to rise if there's a crypto bull market, but it also has actual business fundamentals, regardless of speculation.