In its relatively brief life as a publicly traded company, Block (XYZ 2.00%) has gone through several transformations. It's been a near pure-play transaction processor, then a burgeoning financial services company, then a major institutional investor in cryptocurrency.
Through these changes, the once-impressive growth rates of its core businesses cooled off in the early part of this decade. Since then, the stock has been something of a laggard.
Blocked
A $1,000 outlay on Block half a decade ago would have withered to $524 as I write this, which, as far as financial sector stocks go, is underwhelming. Every one of the so-called "big four" U.S. banks has done far better, as has the benchmark S&P 500 index.
Image source: Getty Images.
One major problem is that the great motors of Block's growth in the early years slowed notably as they matured. At one point, the company's foundational point-of-sale terminals seemed like they were mushrooming into every corner coffee shop and bistro. Since then, though, the company hasn't managed to poach many larger businesses as clients.
It did plunge enthusiastically into Bitcoin, and today the cryptocurrency is a cornerstone of its business. This hasn't really moved the needle on overall fundamentals, however. In spite of its popularity, widespread adoption of the crypto is years away at best. Meanwhile it remains a clunky asset to buy, let alone use to pay for most goods.
New map wanted?
I think that after contracting crypto fever, Block essentially lost its way. It became something of a Bitcoin hound like many investors (and not a few companies), to the detriment of the parts of its business that were working, even if not growing hotly.
These days, I think that Block is an investment only for Bitcoin fans. While that's certainly not a bad stance to take given the cryptocurrency's impressive rise -- hopefully it won't be crashing anytime soon! -- I think there are better ways to profit from the digital coin and better fintech stocks to own.
