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

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Square (SQ - Free Report) closed the most recent trading day at $185.74, moving -0.65% from the previous trading session. This change lagged the S&P 500's daily gain of 0.47%. Elsewhere, the Dow gained 0.4%, while the tech-heavy Nasdaq added 0.33%.

Coming into today, shares of the mobile payments services provider had gained 23.72% in the past month. In that same time, the Computer and Technology sector gained 6.61%, while the S&P 500 gained 3.42%.

SQ will be looking to display strength as it nears its next earnings release, which is expected to be November 5, 2020. In that report, analysts expect SQ to post earnings of $0.14 per share. This would mark a year-over-year decline of 44%. Meanwhile, our latest consensus estimate is calling for revenue of $2.08 billion, up 64% from the prior-year quarter.

For the full year, our Zacks Consensus Estimates are projecting earnings of $0.52 per share and revenue of $7.26 billion, which would represent changes of -35% and +53.94%, respectively, from the prior year.

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.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. 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 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 12.26% higher. SQ currently has a Zacks Rank of #1 (Strong Buy).

Investors should also note SQ's current valuation metrics, including its Forward P/E ratio of 357.25. For comparison, its industry has an average Forward P/E of 87.57, which means SQ is trading at a premium to the group.

We can also see that SQ currently has a PEG ratio of 8.73. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. Internet - Software stocks are, on average, holding a PEG ratio of 7.03 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 165, which puts it in the bottom 35% 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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