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

Square (SQ) closed at $69.53 in the latest trading session, marking a -1.18% move from the prior day. This change lagged the S&P 500's 0.84% gain on the day. Elsewhere, the Dow gained 0.92%, while the tech-heavy Nasdaq added 1.06%.

Heading into today, shares of the mobile payments services provider had gained 8.01% over the past month, outpacing the Computer and Technology sector's gain of 6.54% and the S&P 500's gain of 3.95% 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 $0.21 per share, which would represent year-over-year growth of 50%. Our most recent consensus estimate is calling for quarterly revenue of $1.18 billion, up 27.06% from the year-ago period.

Any recent changes to analyst estimates for SQ should also be noted by investors. These revisions help to show the ever-changing nature of near-term business trends. 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. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Within the past 30 days, our consensus EPS projection has moved 2.02% lower. SQ currently has a Zacks Rank of #3 (Hold).

Investors should also note SQ's current valuation metrics, including its Forward P/E ratio of 74.18. This valuation marks a premium compared to its industry's average Forward P/E of 56.99.

Investors should also note that SQ has a PEG ratio of 2.24 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 2.55 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 102, putting it in the top 40% 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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