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

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Square (SQ - Free Report) closed at $77.14 in the latest trading session, marking a 0.88% move from the prior day. The stock outpaced the S&P 500's daily loss of 0.17%. Elsewhere, the Dow lost 0.3%, while the tech-heavy Nasdaq lost 0.14%.

Coming into today, shares of the mobile payments services provider had gained 5.39% in the past month. In that same time, the Computer and Technology sector gained 0.61%, while the S&P 500 gained 2.34%.

Wall Street will be looking for positivity from SQ as it approaches its next earnings report date. This is expected to be November 14, 2018. On that day, SQ is projected to report earnings of $0.11 per share, which would represent year-over-year growth of 57.14%. Meanwhile, our latest consensus estimate is calling for revenue of $860.52 million, up 47.06% from the prior-year quarter.

SQ's full-year Zacks Consensus Estimates are calling for earnings of $0.45 per share and revenue of $3.23 billion. These results would represent year-over-year changes of +66.67% and +45.72%, respectively.

Investors might also notice recent changes to analyst estimates for SQ. These revisions typically reflect the latest short-term business trends, which can change frequently. 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. 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 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. Over the past month, the Zacks Consensus EPS estimate has moved 215.15% lower. SQ is currently a Zacks Rank #3 (Hold).

Investors should also note SQ's current valuation metrics, including its Forward P/E ratio of 168.62. For comparison, its industry has an average Forward P/E of 67.68, which means SQ is trading at a premium to the group.

Also, we should mention that SQ has a PEG ratio of 6.74. 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. The Internet - Software industry currently had an average PEG ratio of 3.75 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 102, which puts it in the top 40% 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.

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


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