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Square (SQ) Outpaces Stock Market Gains: What You Should Know

Zacks Equity Research
·3 mins read

In the latest trading session, Square (SQ) closed at $152.31, marking a +1.82% move from the previous day. The stock outpaced the S&P 500's daily gain of 0.3%. Elsewhere, the Dow gained 0.2%, while the tech-heavy Nasdaq added 0.37%.

Heading into today, shares of the mobile payments services provider had lost 2.7% over the past month, outpacing the Computer and Technology sector's loss of 5.52% and the S&P 500's loss of 5.02% in that time.

SQ will be looking to display strength as it nears its next earnings release. The company is expected to report EPS of $0.12, down 52% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $1.99 billion, up 57.36% from the year-ago period.

SQ's full-year Zacks Consensus Estimates are calling for earnings of $0.49 per share and revenue of $7.06 billion. These results would represent year-over-year changes of -38.75% and +49.83%, respectively.

Investors should also note any recent changes to analyst estimates for SQ. These revisions help to show the ever-changing nature of near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an 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 2.25% higher. SQ is currently sporting a Zacks Rank of #3 (Hold).

Digging into valuation, SQ currently has a Forward P/E ratio of 306.33. Its industry sports an average Forward P/E of 76.32, so we one might conclude that SQ is trading at a premium comparatively.

Meanwhile, SQ's PEG ratio is currently 8.42. 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 5.72 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 173, which puts it in the bottom 32% 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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Square, Inc. (SQ) : Free Stock Analysis Report
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Zacks Investment Research