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Block (SQ) Stock Sinks As Market Gains: What You Should Know

·3 min read

Block (SQ) closed at $68.56 in the latest trading session, marking a -1.47% move from the prior day. This change lagged the S&P 500's 0.34% gain on the day. Meanwhile, the Dow gained 0.1%, and the Nasdaq, a tech-heavy index, lost 0.05%.

Prior to today's trading, shares of the mobile payments services provider had lost 18.98% over the past month. This has lagged the Business Services sector's loss of 9.44% and the S&P 500's loss of 7.95% in that time.

Wall Street will be looking for positivity from Block as it approaches its next earnings report date. On that day, Block is projected to report earnings of $0.26 per share, which would represent a year-over-year decline of 29.73%. Our most recent consensus estimate is calling for quarterly revenue of $4.54 billion, up 18.16% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $0.90 per share and revenue of $17.69 billion, which would represent changes of -47.37% and +0.16%, respectively, from the prior year.

Investors should also note any recent changes to analyst estimates for Block. These recent revisions tend to reflect the evolving nature of short-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 0.23% lower. Block is currently a Zacks Rank #3 (Hold).

Investors should also note Block's current valuation metrics, including its Forward P/E ratio of 76.92. This represents a premium compared to its industry's average Forward P/E of 24.58.

It is also worth noting that SQ currently has a PEG ratio of 10.85. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. SQ's industry had an average PEG ratio of 1.92 as of yesterday's close.

The Technology Services industry is part of the Business Services sector. This group has a Zacks Industry Rank of 144, putting it in the bottom 43% 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.

You can find more information on all of these metrics, and much more, on Zacks.com.


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