Square (SQ) closed the most recent trading day at $226.89, moving -1.24% from the previous trading session. This move lagged the S&P 500’s daily gain of 0.57%. Elsewhere, the Dow gained 1.44%, while the tech-heavy Nasdaq lost 0.61%.
Prior to today’s trading, shares of the mobile payments services provider had gained 7.86% over the past month. This has outpaced the Computer and Technology sector’s gain of 1.94% and the S&P 500’s gain of 0.83% in that time.
SQ will be looking to display strength as it nears its next earnings release. On that day, SQ is projected to report earnings of $0.23 per share, which would represent no growth from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $3.02 billion, up 130.21% from the prior-year quarter.
Any recent changes to analyst estimates for SQ should also be noted by investors. 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. 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, 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 17.29% higher. SQ is currently a Zacks Rank #4 (Sell).
Looking at its valuation, SQ is holding a Forward P/E ratio of 214.72. This valuation marks a premium compared to its industry’s average Forward P/E of 82.95.
Meanwhile, SQ’s PEG ratio is currently 6.51. 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 4.21 as of yesterday’s close.
The Internet – Software industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 212, putting it in the bottom 17% 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.
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