In the latest trading session, Square (SQ) closed at $99, marking a +1.08% move from the previous day. The stock outpaced the S&P 500’s daily of 0%. At the same time, the Dow added 0.07%, and the tech-heavy Nasdaq gained 0.06%.
Heading into today, shares of the mobile payments services provider had gained 11.62% over the past month, outpacing the Computer and Technology sector’s loss of 0.1% and the S&P 500’s gain of 0.78% in that time.
SQ will be looking to display strength as it nears its next earnings release, which 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 recent revisions tend to reflect the evolving nature of short-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company’s business outlook.
Research indicates that these estimate revisions are directly correlated with near-term share price momentum. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.
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. The Zacks Consensus EPS estimate remained stagnant within the past month. SQ currently has a Zacks Rank of #3 (Hold).
Valuation is also important, so investors should note that SQ has a Forward P/E ratio of 217.15 right now. This represents a premium compared to its industry’s average Forward P/E of 70.21.
Investors should also note that SQ has a PEG ratio of 8.69 right now. 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 4.16 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 82, putting it in the top 32% 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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