Back to top

Image: Bigstock

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

Read MoreHide Full Article

In the latest trading session, Square (SQ - Free Report) closed at $253.90, marking a -0.73% move from the previous day. This change lagged the S&P 500's 0.02% loss on the day.

Heading into today, shares of the mobile payments services provider had gained 23.45% over the past month, outpacing the Computer and Technology sector's gain of 10.8% and the S&P 500's gain of 5.48% in that time.

Investors will be hoping for strength from SQ as it approaches its next earnings release, which is expected to be May 6, 2021. The company is expected to report EPS of $0.16, up 900% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $3.37 billion, up 143.69% from the prior-year quarter.

For the full year, our Zacks Consensus Estimates are projecting earnings of $1.18 per share and revenue of $14.3 billion, which would represent changes of +40.48% and +50.6%, respectively, from the prior year.

It is also important to note the recent changes to analyst estimates for SQ. These revisions typically reflect the latest short-term business trends, which can change frequently. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. 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.

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. Within the past 30 days, our consensus EPS projection has moved 5.71% higher. SQ currently has a Zacks Rank of #3 (Hold).

Digging into valuation, SQ currently has a Forward P/E ratio of 216.51. This valuation marks a premium compared to its industry's average Forward P/E of 77.53.

Meanwhile, SQ's PEG ratio is currently 6.47. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. Internet - Software stocks are, on average, holding a PEG ratio of 4.4 based on yesterday's closing prices.

The Internet - Software industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 192, putting it in the bottom 25% 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.

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


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


Block, Inc. (SQ) - free report >>

Published in