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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 $243.35, marking a +0.6% move from the previous day. This move outpaced the S&P 500's daily gain of 0.35%.

Prior to today's trading, shares of the mobile payments services provider had gained 10.28% over the past month. This has outpaced the Computer and Technology sector's gain of 5.62% and the S&P 500's gain of 3.64% in that time.

Investors will be hoping for strength from SQ as it approaches its next earnings release. In that report, analysts expect SQ to post earnings of $0.32 per share. This would mark year-over-year growth of 77.78%. Our most recent consensus estimate is calling for quarterly revenue of $5.02 billion, up 160.97% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $1.51 per share and revenue of $20.25 billion, which would represent changes of +79.76% and +113.19%, respectively, from the prior year.

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 a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. 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. Over the past month, the Zacks Consensus EPS estimate has moved 2.89% higher. SQ is currently sporting a Zacks Rank of #4 (Sell).

Looking at its valuation, SQ is holding a Forward P/E ratio of 160.44. This valuation marks a premium compared to its industry's average Forward P/E of 62.08.

Also, we should mention that SQ has a PEG ratio of 3.4. 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. Internet - Software stocks are, on average, holding a PEG ratio of 3.72 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 204, which puts it in the bottom 20% 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.

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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