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

Zacks Equity Research
·3 min read

Square (SQ) closed at $217.64 in the latest trading session, marking a -1.54% move from the prior day. This change lagged the S&P 500's daily gain of 0.64%. Meanwhile, the Dow gained 0.65%, and the Nasdaq, a tech-heavy index, added 0.14%.

Prior to today's trading, shares of the mobile payments services provider had gained 9.43% over the past month. This has outpaced the Computer and Technology sector's gain of 4.51% and the S&P 500's gain of 3.19% in that time.

Investors will be hoping for strength from SQ as it approaches its next earnings release. In that report, analysts expect SQ to post earnings of $0.23 per share. This would mark no growth from the year-ago period. Our most recent consensus estimate is calling for quarterly revenue of $3.02 billion, up 130.21% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $0.76 per share and revenue of $9.37 billion, which would represent changes of -5% and +98.69%, respectively, from the prior year.

Investors might also notice recent changes to analyst estimates for SQ. Recent revisions tend to reflect the latest near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. 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. The Zacks Consensus EPS estimate has moved 81.82% lower within the past month. SQ currently has a Zacks Rank of #3 (Hold).

Valuation is also important, so investors should note that SQ has a Forward P/E ratio of 292.02 right now. This represents a premium compared to its industry's average Forward P/E of 83.57.

Meanwhile, SQ's PEG ratio is currently 8.85. 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 6.03 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 198, which puts it in the bottom 23% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our 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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