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Square (SQ) Gains But Lags Market: What You Should Know

Zacks Equity Research

Square (SQ) closed the most recent trading day at $86.72, moving +0.73% from the previous trading session. This move lagged the S&P 500's daily gain of 1.31%. At the same time, the Dow added 1.9%, and the tech-heavy Nasdaq gained 1.01%.

SQ will be looking to display strength as it nears its next earnings release. The company is expected to report EPS of -$0.11, down 152.38% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $1.11 billion, down 5.39% from the year-ago period.

SQ's full-year Zacks Consensus Estimates are calling for earnings of $0.14 per share and revenue of $5.11 billion. These results would represent year-over-year changes of -82.5% and +8.33%, respectively.

Investors might also notice recent changes to analyst estimates for SQ. These revisions typically reflect the latest short-term business trends, which can change frequently. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Our research shows that these estimate changes are directly correlated with near-term stock prices. 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. The Zacks Consensus EPS estimate has moved 18.36% lower within the past month. SQ is currently a Zacks Rank #3 (Hold).

Investors should also note SQ's current valuation metrics, including its Forward P/E ratio of 622.34. Its industry sports an average Forward P/E of 52.69, so we one might conclude that SQ is trading at a premium comparatively.

Also, we should mention that SQ has a PEG ratio of 41.11. 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. The Internet - Software industry currently had an average PEG ratio of 3.28 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 26, which puts it in the top 11% 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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