Block (XYZ -3.63%), formerly known as Square, reported gross profit of slightly under $1.6 billion in its third quarter of 2022, which ended Sept. 30. Thats up 38% from the prior-year period. Its two major segments, Square and Cash App, both posted remarkable growth amid the softening macro environment. And the overall performance continues a generally positive historical trend for the business. 

As a result of a strong fundamental performance, like what we saw last quarter, this top fintech stock has seen its price soar by more than 350%, as of Dec. 28, since its initial public offering in November 2015, trouncing the Nasdaq Composite Index. And this is after shares have fallen precipitously over the past year and a half. 

But what about the future? Is it possible that Block's stock could double by 2027? Let's take a closer look. 

Growing the business 

Block is probably best known for its Square segment, which offers more than 30 hardware, software, and financial-services products for mainly smaller merchants. The objective is to make it easier for these businesses to accept payments, as well as handle other tasks such as payroll, banking, and invoices. In the latest quarter, this segment processed a sizable $50 billion in gross payment volume. 

Introducing new tools to drive higher engagement and stickiness, as well as expanding into new markets, is the growth objective. Square currently has a presence in the U.S., Canada, Japan, Australia, the U.K., Ireland, France, and Spain. But what's promising is that 85% of overall gross profit in the Square ecosystem is still derived from the U.S., meaning tons of foreign expansion potential. 

And then there's Cash App, a popular tool for individuals looking for a modern, sleek, consumer-friendly way to handle their personal finances. Cash App currently counts almost 50 million monthly active customers, up 20% year over year. In addition to allowing peer-to-peer payments, these users are engaging with other services. The Cash Card had 18 million monthly actives in September, more than a 40% increase over the same month in 2021. 

Block wants to continue making it frictionless for Cash App customers to fund their accounts. What really stands out is that September saw greater than $2 billion of direct deposits into Cash App. This benefits the business because these consumers now have the means to transact more often, leading to more transaction fees and revenue. 

Historically, Block has had no problem at all with trying to achieve growth. Revenue in 2012, the earliest data available, totaled just $203 million. That figure ballooned to nearly $18 billion in 2021. 

Focusing on building products and services that have a clear market fit and are not only desired by both consumers and businesses, but essential to their daily financial lives, puts Block in a powerful position. And this is a highly coveted quality that investors should appreciate. 

The future looks bright 

I don't think there's much doubt about the direction of Block's business. The company has carved out a niche in the lucrative payments industry, and it still has a massive growth runway ahead. Wall Street consensus estimates call for revenue and net income to total $33.3 billion and $4.1 billion, respectively, in 2026, which obviously would translate to massive gains based on what the company will do this year. 

Despite an undeniably positive outlook, it's absolutely paramount that investors also consider the valuation. Block's stock is down 63% as of this writing in 2022, and it now trades at a price-to-sales multiple of 1.9. This valuation is about as cheap as the stock has ever been. 

For Block's share price to double by 2027, good for a 19% annualized gain over the next four years, the business would need to continue its impressive upward trajectory we've been so accustomed to seeing up to this point. And it's not a stretch to believe this will happen. In addition, an attractive valuation, characterized by soaring pessimism surrounding the stock, provides added upside to the equation. This might make Block a smart buy for your portfolio right now.