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

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In the latest trading session, Square (SQ - Free Report) closed at $263.08, marking a +1.81% move from the previous day. This change outpaced the S&P 500's 1.11% gain on the day.

Prior to today's trading, shares of the mobile payments services provider had gained 12.27% over the past month. This has outpaced the Computer and Technology sector's gain of 8.47% and the S&P 500's gain of 4.72% in that time.

Investors will be hoping for strength from SQ as it approaches its next earnings release, which is expected to be May 6, 2021. In that report, analysts expect SQ to post earnings of $0.15 per share. This would mark year-over-year growth of 850%. Meanwhile, our latest consensus estimate is calling for revenue of $3.37 billion, up 143.69% from the prior-year quarter.

SQ's full-year Zacks Consensus Estimates are calling for earnings of $1.17 per share and revenue of $14.3 billion. These results would represent year-over-year changes of +39.29% and +50.6%, respectively.

It is also important to note the 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.

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 0.57% lower. SQ is currently sporting a Zacks Rank of #3 (Hold).

In terms of valuation, SQ is currently trading at a Forward P/E ratio of 234.2. For comparison, its industry has an average Forward P/E of 76.31, which means SQ is trading at a premium to the group.

Also, we should mention that SQ has a PEG ratio of 6.55. 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. SQ's industry had an average PEG ratio of 4.13 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 211, putting it in the bottom 17% 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.

To follow SQ in the coming trading sessions, be sure to utilize Zacks.com.


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