In the latest trading session, Block (SQ) closed at $64.15, marking a -1.35% move from the previous day. This change lagged the S&P 500's 0.45% loss on the day. Meanwhile, the Dow lost 0.67%, and the Nasdaq, a tech-heavy index, lost 0.05%.
Prior to today's trading, shares of the mobile payments services provider had gained 7.84% over the past month. This has outpaced the Business Services sector's loss of 1.77% and the S&P 500's loss of 1.89% in that time.
Investors will be hoping for strength from Block as it approaches its next earnings release, which is expected to be August 4, 2022. In that report, analysts expect Block to post earnings of $0.18 per share. This would mark a year-over-year decline of 72.73%. Our most recent consensus estimate is calling for quarterly revenue of $4.39 billion, down 6.29% from the year-ago period.
For the full year, our Zacks Consensus Estimates are projecting earnings of $0.85 per share and revenue of $17.98 billion, which would represent changes of -50.29% and +1.79%, respectively, from the prior year.
It is also important to note the recent changes to analyst estimates for Block. Recent revisions tend to reflect the latest near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.
Our research shows that these estimate changes are directly correlated with near-term stock prices. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.
The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 7.69% lower. Block currently has a Zacks Rank of #5 (Strong Sell).
In terms of valuation, Block is currently trading at a Forward P/E ratio of 76.51. For comparison, its industry has an average Forward P/E of 20.03, which means Block is trading at a premium to the group.
Investors should also note that SQ has a PEG ratio of 5.37 right now. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. Technology Services stocks are, on average, holding a PEG ratio of 2.02 based on yesterday's closing prices.
The Technology Services industry is part of the Business Services sector. This group has a Zacks Industry Rank of 151, putting it in the bottom 41% of all 250+ industries.
The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Make sure to utilize Zacks.com to follow all of these stock-moving metrics, and more, in the coming trading sessions.
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