The last few years have been very interesting for investors. For example, some companies experienced an increase in demand during the pandemic, only to see those gains slow as the economy normalized. This caused market sentiment to swing wildly.

one fintech stocks in particular, it ended up being a clear portrait of this volatile trend. And right now, it’s trading 77% below its all-time high, which was set in August 2021. Read on to learn more about this business and why it could go higher sooner. Wall Street notices

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The main reason why this business should be considered a sleeper option is because of its valuation. Shares of blog (NYSE: XYZ) currently the trade to an attractive E.V-to-EBIT ratio of 15.1. In a market environment where valuation is a major concern, this opportunity stands out.

All things being equal, investors should want to pay a lower valuation multiple rather than a more expensive one. This introduces a margin of safety if your expectations about a company’s future results turn out to be too optimistic. Allocating capital in this way helps minimize downside risk.

Block is a growing and profitable business. The Square segment posted 9% year-over-year gross profit growth in the third quarter. The Cash app, with its 58 million monthly active users, grew gross profit by an even better 24% in the third quarter. And the company’s operating income has soared.

The main offerings of the Square and Cash app deservedly get most of the attention of the investment community. Consequently, that of the company Bitcoin (CRYPTO: BTC) initiatives can be easily overlooked. Investors interested in Block should understand what is going on.

I believe Bitcoin presents business with an underappreciated advantage. CEO Jack Dorsey has been publicly bullish on Bitcoin since 2021, and his belief stems from the view that the Internet will need a native currency. Being digital, decentralized and scarce, Bitcoin is the best candidate to fulfill this purpose.

Block’s Bitcoin projects cover a wide range of activities. The company sells a self-custodial Bitcoin wallet called Bitkey. It offers a suite of cryptocurrency mining rig under the nickname of Proto. Cash app users can trade Bitcoin. And Square sellers can now accept Bitcoin payments.

If the price of Bitcoin starts to rise rapidly, it can lead to a rapid positive change in market sentiment. The investment community could begin to see Block as an even more advanced company that is better positioned than its peers when it comes to Bitcoin. At that point, the valuation could reach a less attractive entry point.

Before you buy shares in Block, keep this in mind:

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Neil Patel has no position in any of the aforementioned stocks. The Motley Fool has positions and recommends Bitcoin and Block. The Motley Fool has one disclosure policy.

The Sleeper Fintech Stock That Could Rise Ahead of Wall Street Warnings was originally published by The Motley Fool