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Square (SQ) Dips More Than Broader Markets: What You Should Know

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Square (SQ - Free Report) closed the most recent trading day at $115.24, moving -1.76% from the previous trading session. This change lagged the S&P 500's daily loss of 1.22%. Elsewhere, the Dow lost 0.19%, while the tech-heavy Nasdaq lost 0.54%.

Prior to today's trading, shares of the mobile payments services provider had lost 30.38% over the past month. This has lagged the Computer and Technology sector's loss of 11.78% and the S&P 500's loss of 6.58% in that time.

Square will be looking to display strength as it nears its next earnings release. The company is expected to report EPS of $0.20, down 37.5% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $3.95 billion, up 25.13% from the year-ago period.

It is also important to note the recent changes to analyst estimates for Square. These revisions typically reflect the latest short-term business trends, which can change frequently. 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 17.71% lower. Square is currently sporting a Zacks Rank of #4 (Sell).

Investors should also note Square's current valuation metrics, including its Forward P/E ratio of 72.77. This valuation marks a premium compared to its industry's average Forward P/E of 47.22.

Investors should also note that SQ has a PEG ratio of 2.15 right now. 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 2.68 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 165, putting it in the bottom 36% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual 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 to follow all of these stock-moving metrics, and more, in the coming trading sessions.

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