To say that shares of Block (SQ 2.32%) had a monumental finish to 2023 would be an understatement. From the start of November to the end of the year, the stock jumped 89%. It has cooled off a bit as the calendar turned to 2024, but optimism is taking over.

While it's easy to get caught up in recent gains, it's always best to take a step back, and focus on the factors that really matter for long-term investors.

So, is this fintech stock a buy right now? Here's what you need to know.

Taking care of customers

In the internet age, companies that deliver a superior user experience typically do well. That's because barriers to entry are low, and so customers will always be presented with numerous options to choose from. Therefore, it's best for a business to find ways to stand out.

I think Block excels in this regard. Its Square segment caters specifically to merchants, offering a wide range of financial services, software, and hardware solutions to help them better manage their operations. The business saw that this part of the market's needs was being unmet by larger financial institutions. In the latest quarter, it processed $55.7 billion of gross payment volume, up 11% year over year.

Then there's Cash App, which is a personal finance mobile app that lets people handle basic banking needs, like sending or receiving money, setting up direct deposit, signing up for a debit card, or buying stocks and Bitcoin. It counts 55 million monthly active users. It also improves upon the outdated tech infrastructure and customer service of traditional banks, focusing on a digitally native customer base.

Posting healthy growth

To be clear, Block isn't posting the same growth it was during the depths of the pandemic. But its recent gains have still been healthy.

The Square segment posted a 15% increase in gross profit in the quarter ended Sept. 30. Cash App saw its gross profit jump 27% in the period. Given what have been uncertain economic times, investors should be encouraged by this growth.

With the Federal Reserve signaling that it could cut rates multiple times this year, investors will find it easy to be optimistic about a business like Block. In other words, a more favorable macro backdrop could be a financial boon.

With people willing to spend more, Square could see its merchants handling more volume, leading to greater payments activity and higher fees. On the Cash App side, people who have greater confidence about the direction of the economy might sign up for and spend using the Cash Card, which can result in more fees as well.

What about the valuation?

Although Block shares absolutely soared in the last couple months of 2023, they remain roughly 75% below their all-time high, a mark set in the summer of 2021 during a raging bull market for equities. It's accurate to say that the enthusiasm has tapered quite a bit since then.

However, for investors looking to scoop up shares now, it could be a wonderful time to do so. The stock trades at a price-to-sales ratio of 2 right now. That's about one-third the average valuation since the stock went public in late 2015.

It's probably safe to assume that shares are undervalued right now, especially relative to Block's outsized growth potential. This makes the stock worthy of your investment consideration.