Markets
SQ

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

Square (SQ) closed at $75.59 in the latest trading session, marking a +1.71% move from the prior day. The stock outpaced the S&P 500's daily gain of 1.29%. Elsewhere, the Dow gained 1.49%, while the tech-heavy Nasdaq added 1.46%.

Prior to today's trading, shares of the mobile payments services provider had gained 14.02% over the past month. This has outpaced the Computer and Technology sector's gain of 6.08% and the S&P 500's gain of 4.57% in that time.

SQ will be looking to display strength as it nears its nex t earnings release, which is expected to be February 27, 2019. In tha t report , analysts expect SQ to post earnings of $0.13 per share. This would mark year-over-year growth of 62.5%. Meanwhile, our latest consensus estimate is calling for revenue of $909.18 million, up 47.58% from the prior-year quarter.

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.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. 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 remained stagnant. SQ is currently a Zacks Rank #2 (Buy).

Digging into valuation, SQ currently has a Forward P/E ratio of 106.76. For comparison, its industry has an average Forward P/E of 50.63, which means SQ is trading at a premium to the group.

We can also see that SQ currently has a PEG ratio of 4.27. 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. Internet - Software stocks are, on average, holding a PEG ratio of 2.85 based on yesterday's closing prices.

The Internet - Software industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 31, which puts it in the top 13% 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.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Square, Inc. (SQ): Get Free Report

To read this article on Zacks.com click here.

Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

In This Story

SQ

Other Topics

Investing Stocks

Latest Markets Videos

    Zacks

    Zacks is the leading investment research firm focusing on stock research, analysis and recommendations. In 1978, our founder discovered the power of earnings estimate revisions to enable profitable investment decisions. Today, that discovery is still the heart of the Zacks Rank. A wealth of resources for individual investors is available at www.zacks.com.

    Learn More