Technology

Square (SQ) Outpaces Stock Market Gains: What You Should Know

In the latest trading session, Square (SQ) closed at $76.32, marking a +1.87% move from the previous day. This change outpaced the S&P 500's 1.16% gain on the day. Meanwhile, the Dow gained 1.27%, and the Nasdaq, a tech-heavy index, added 1.29%.

Heading into today, shares of the mobile payments services provider had lost 7.78% over the past month, lagging the Computer and Technology sector's gain of 3.18% and the S&P 500's gain of 1.92% in that time.

SQ will be looking to display strength as it nears its next earnings release. In that report, analysts expect SQ to post earnings of $0.08 per share. This would mark year-over-year growth of 33.33%. Meanwhile, our latest consensus estimate is calling for revenue of $937.63 million, up 40.24% from the prior-year quarter.

For the full year, our Zacks Consensus Estimates are projecting earnings of $0.74 per share and revenue of $4.41 billion, which would represent changes of +57.45% and +33.7%, respectively, from the prior year.

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. With this in mind, we can consider positive estimate revisions a sign of optimism about 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. Within the past 30 days, our consensus EPS projection has moved 74.6% higher. SQ is holding a Zacks Rank of #2 (Buy) right now.

Looking at its valuation, SQ is holding a Forward P/E ratio of 101.59. This valuation marks a premium compared to its industry's average Forward P/E of 56.37.

Investors should also note that SQ has a PEG ratio of 4.06 right now. 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. The Internet - Software industry currently had an average PEG ratio of 3.14 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 56, which puts it in the top 22% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual 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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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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