Square (SQ) closed the most recent trading day at $187.49, moving -1.56% from the previous trading session. This change lagged the S&P 500's daily loss of 0.66%. Meanwhile, the Dow lost 0.58%, and the Nasdaq, a tech-heavy index, lost 0.8%.
Prior to today's trading, shares of the mobile payments services provider had gained 23.28% over the past month. This has outpaced the Computer and Technology sector's gain of 8.25% and the S&P 500's gain of 5.22% in that time.
SQ will be looking to display strength as it nears its next earnings release, which is expected to be November 5, 2020. The company is expected to report EPS of $0.13, down 48% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $2.08 billion, up 64% from the prior-year quarter.
SQ's full-year Zacks Consensus Estimates are calling for earnings of $0.52 per share and revenue of $7.26 billion. These results would represent year-over-year changes of -35% and +53.94%, respectively.
Any recent changes to analyst estimates for SQ should also be noted by investors. These revisions typically reflect the latest short-term business trends, which can change frequently. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.
Based on our research, we believe these estimate revisions are directly related to near-team stock moves. 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, 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 12.36% higher. SQ is currently a Zacks Rank #1 (Strong Buy).
Investors should also note SQ's current valuation metrics, including its Forward P/E ratio of 366.88. This represents a premium compared to its industry's average Forward P/E of 91.77.
It is also worth noting that SQ currently has a PEG ratio of 8.97. 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. SQ's industry had an average PEG ratio of 6.58 as of yesterday's close.
The Internet - Software industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 160, putting it in the bottom 37% 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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