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

Zacks Equity Research
·3 mins read

In the latest trading session, Square (SQ) closed at $162.55, marking a -1.37% move from the previous day. This change lagged the S&P 500's 0.83% gain on the day. Elsewhere, the Dow gained 1.2%, while the tech-heavy Nasdaq added 0.74%.

Heading into today, shares of the mobile payments services provider had lost 1.11% over the past month, outpacing the Computer and Technology sector's loss of 5.53% and the S&P 500's loss of 4.83% 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 $0.13, down 48% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $1.99 billion, up 57.36% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $0.51 per share and revenue of $7.06 billion. These totals would mark changes of -36.25% and +49.83%, respectively, from last year.

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. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

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. Within the past 30 days, our consensus EPS projection has moved 10.53% higher. SQ is currently a Zacks Rank #3 (Hold).

Investors should also note SQ's current valuation metrics, including its Forward P/E ratio of 322.01. For comparison, its industry has an average Forward P/E of 78.58, which means SQ is trading at a premium to the group.

We can also see that SQ currently has a PEG ratio of 7.87. 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. The Internet - Software industry currently had an average PEG ratio of 6.41 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 188, which puts it in the bottom 26% 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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