Back to top

Image: Bigstock

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

Read MoreHide Full Article

In the latest trading session, Block (SQ - Free Report) closed at $60.68, marking a -1.94% move from the previous day. This change lagged the S&P 500's daily gain of 0.56%. Elsewhere, the Dow gained 0.41%, while the tech-heavy Nasdaq added 1.35%.

Prior to today's trading, shares of the mobile payments services provider had lost 16.55% over the past month. This has lagged the Business Services sector's loss of 2.84% and the S&P 500's loss of 1.48% in that time.

Block will be looking to display strength as it nears its next earnings release. The company is expected to report EPS of $0.32, up 77.78% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $4.54 billion, up 14.74% from the prior-year quarter.

For the full year, our Zacks Consensus Estimates are projecting earnings of $1.67 per share and revenue of $19.76 billion, which would represent changes of +67% and +12.69%, respectively, from the prior year.

Investors should also note any recent changes to analyst estimates for Block. These recent revisions tend to reflect the evolving nature of short-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. 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. The Zacks Consensus EPS estimate has moved 141.94% lower within the past month. Block is holding a Zacks Rank of #3 (Hold) right now.

Investors should also note Block's current valuation metrics, including its Forward P/E ratio of 37.16. This valuation marks a premium compared to its industry's average Forward P/E of 20.8.

Also, we should mention that SQ has a PEG ratio of 1.79. 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. Technology Services stocks are, on average, holding a PEG ratio of 1.79 based on yesterday's closing prices.

The Technology Services industry is part of the Business Services sector. This group has a Zacks Industry Rank of 145, putting it in the bottom 43% 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.

To follow SQ in the coming trading sessions, be sure to utilize 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