Square (SQ) Gains But Lags Market: What You Should Know

Square (SQ) closed the most recent trading day at $80.90, moving +1.38% from the previous trading session. This change lagged the S&P 500's 1.5% gain on the day. At the same time, the Dow added 1.44%, and the tech-heavy Nasdaq gained 2.1%.

Prior to today's trading, shares of the mobile payments services provider had gained 27.54% over the past month. This has outpaced the Computer and Technology sector's gain of 3.43% and the S&P 500's gain of 0.54% in that time.

Wall Street will be looking for positivity from SQ as it approaches its next earnings report date. This is expected to be February 26, 2020. In that report, analysts expect SQ to post earnings of $0.21 per share. This would mark year-over-year growth of 50%. Meanwhile, our latest consensus estimate is calling for revenue of $1.18 billion, up 26.97% from the prior-year quarter.

Investors should also note any recent changes to analyst estimates for SQ. These revisions help to show the ever-changing nature of near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

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.

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 22.22% lower. SQ is currently a Zacks Rank #3 (Hold).

Looking at its valuation, SQ is holding a Forward P/E ratio of 86.09. This represents a premium compared to its industry's average Forward P/E of 50.29.

We can also see that SQ currently has a PEG ratio of 2.6. 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. Internet - Software stocks are, on average, holding a PEG ratio of 2.56 based on yesterday's closing prices.

The Internet - Software industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 104, putting it in the top 41% 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.

Make sure to utilize Zacks. Com to follow all of these stock-moving metrics, and more, in the coming trading sessions.

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