It was an exceptional day for the Block Inc (ASX: SQ2) stock price on Tuesday. The S&P/ASX 200 Index (ASX: XJO) did record a mild gain of 0.11%. But Block shares surged by an impressive 3.33%.
The US-based tech company even closed at a new 52-week high of $124.88 a share.
Block's gains over recent months have been nothing short of extraordinary. It was only in October last year that the company formerly known as Square hit a new 52-week (and ASX record) low of $60.56. That means ASX investors have now enjoyed a whopping gain of over 105% in just a few months.
So for the investors who are looking on with envy, could Block stock still be worth a buy at this new 52-week high?
Block is an interesting case in my view. I agree with my Fool colleague Tony that although investors have enjoyed some massive gains in recent months, the shares still look cheap compared to where they have traded in the past.
Despite the triple-digit gain since late October, the company is still down by more than 27% since its ASX debut back in early 2022, when it replaced the old Afterpay (which is now part of Block).
The Block share price also only has a (still decent) 15% or so gain to boast of over the past 12 months.
But does it remain at good value today?
Image source: Getty Images
Is the Block share price one of the best ASX stocks to buy now?
Well, I think there are signs that it is. I've been impressed with the company's recent cost-cutting drive. As well as the continuing growth of its flagship Cash App in the United States and internationally.
However, some other branches of Block's business model give me pause. Block CEO Jack Dorsey is a well-known advocate of increased cryptocurrency use. Under his watch, the company has made several large bets on a bright future for cryptocurrencies like Bitcoin (CRYPTO: BTC). Bitcoin may be enjoying some time in the sun right now, but long-term observers would note that interest in this arena has been highly volatile in the past.
I'm also still not convinced of the long-term profitability of buy now, pay later (BNPL) services like Afterpay. I think Block grossly overpaid for Afterpay when it bought the company in 2022 for US$29 billion.
It would have probably saved a good chunk of that buying price if it waited another few months. Afterpay may still be growing in use. But in my view, we're a long way off the BNPL service becoming a cash cow for Block.
So I think the Block share price could be a buy today for anyone who understands this business well, and has a bullish view of both BNPL and cryptocurrencies. It certainly has a lot of things going for it. But it remains an investment that I'm not tempted by right now.
