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

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Block (SQ - Free Report) closed at $76.12 in the latest trading session, marking a -0.07% move from the prior day. This change lagged the S&P 500's 0.03% gain on the day. At the same time, the Dow added 0.01%, and the tech-heavy Nasdaq lost 1.37%.

Coming into today, shares of the mobile payments services provider had gained 18.81% in the past month. In that same time, the Business Services sector gained 2.68%, while the S&P 500 gained 3.43%.

Wall Street will be looking for positivity from Block as it approaches its next earnings report date. This is expected to be August 3, 2023. In that report, analysts expect Block to post earnings of $0.35 per share. This would mark year-over-year growth of 94.44%. Meanwhile, our latest consensus estimate is calling for revenue of $5.08 billion, up 15.41% from the prior-year quarter.

SQ's full-year Zacks Consensus Estimates are calling for earnings of $1.69 per share and revenue of $20.53 billion. These results would represent year-over-year changes of +69% and +17.13%, respectively.

Any recent changes to analyst estimates for Block should also be noted by investors. 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 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 37.05% lower within the past month. Block is currently a Zacks Rank #3 (Hold).

Valuation is also important, so investors should note that Block has a Forward P/E ratio of 45.02 right now. This valuation marks a premium compared to its industry's average Forward P/E of 22.76.

Meanwhile, SQ's PEG ratio is currently 2.23. 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. SQ's industry had an average PEG ratio of 1.65 as of yesterday's close.

The Technology Services industry is part of the Business Services sector. This group has a Zacks Industry Rank of 125, putting it in the top 50% 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.

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


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