Block (SQ) closed the most recent trading day at $74.76, moving -0.03% from the previous trading session. This change lagged the S&P 500's daily gain of 0.99%. Meanwhile, the Dow gained 0.51%, and the Nasdaq, a tech-heavy index, lost 0.31%.
Prior to today's trading, shares of the mobile payments services provider had gained 23.3% over the past month. This has outpaced the Business Services sector's gain of 9.63% and the S&P 500's gain of 7.91% 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. On that day, Block is projected to report earnings of $0.18 per share, which would represent a year-over-year decline of 72.73%. Meanwhile, our latest consensus estimate is calling for revenue of $4.39 billion, down 6.29% from the prior-year quarter.
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.
Any recent changes to analyst estimates for Block should also be noted by investors. These recent revisions tend to reflect the evolving nature of short-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.
Research indicates that these estimate revisions are directly correlated with near-term share price momentum. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.
Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 7.69% lower. Block is currently sporting a Zacks Rank of #5 (Strong Sell).
Digging into valuation, Block currently has a Forward P/E ratio of 87.98. For comparison, its industry has an average Forward P/E of 23.25, which means Block is trading at a premium to the group.
It is also worth noting that SQ currently has a PEG ratio of 6.17. 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. The Technology Services was holding an average PEG ratio of 2.15 at yesterday's closing price.
The Technology Services industry is part of the Business Services sector. This industry currently has a Zacks Industry Rank of 130, which puts it in the bottom 49% of all 250+ industries.
The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. 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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