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Square (SQ) Dips More Than Broader Markets: What You Should Know

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Square (SQ) closed at $74.39 in the latest trading session, marking a -1.19% move from the prior day. This move lagged the S&P 500's daily loss of 0.06%. Meanwhile, the Dow lost 0.1%, and the Nasdaq, a tech-heavy index, lost 0.1%.

Prior to today's trading, shares of the mobile payments services provider had lost 2.71% over the past month. This has lagged the Computer and Technology sector's gain of 5.14% and the S&P 500's gain of 4.3% in that time.

SQ will be looking to display strength as it nears its next earnings release, which is expected to be May 1, 2019. On that day, SQ is projected to report earnings of $0.08 per share, which would represent year-over-year growth of 33.33%. Meanwhile, our latest consensus estimate is calling for revenue of $937.63 million, up 40.24% from the prior-year quarter.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $0.74 per share and revenue of $4.41 billion. These totals would mark changes of +57.45% and +33.7%, respectively, from last year.

Any recent changes to analyst estimates for SQ should also be noted by investors. These recent revisions tend to reflect the evolving nature of short-term business trends. As a result, we can interpret positive estimate revisions as a good sign for 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.

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 remained stagnant. SQ currently has a Zacks Rank of #2 (Buy).

Valuation is also important, so investors should note that SQ has a Forward P/E ratio of 101.99 right now. This valuation marks a premium compared to its industry's average Forward P/E of 54.84.

It is also worth noting that SQ currently has a PEG ratio of 4.08. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. SQ's industry had an average PEG ratio of 3.23 as of yesterday's close.

The Internet - Software industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 45, which puts it in the top 18% 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.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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