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

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In the latest trading session, Block (SQ - Free Report) closed at $54.99, marking a -1.63% move from the previous day. This change lagged the S&P 500's daily loss of 1.51%. At the same time, the Dow lost 1.71%, and the tech-heavy Nasdaq lost 0.02%.

Heading into today, shares of the mobile payments services provider had lost 18.69% over the past month, lagging the Business Services sector's loss of 11.92% and the S&P 500's loss of 9.52% in that time.

Investors will be hoping for strength from Block as it approaches its next earnings release. On that day, Block is projected to report earnings of $0.26 per share, which would represent a year-over-year decline of 29.73%. Our most recent consensus estimate is calling for quarterly revenue of $4.5 billion, up 17.05% from the year-ago period.

SQ's full-year Zacks Consensus Estimates are calling for earnings of $0.90 per share and revenue of $17.59 billion. These results would represent year-over-year changes of -47.37% and -0.41%, respectively.

Investors should also note any recent changes to analyst estimates for Block. Recent revisions tend to reflect the latest near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

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. Over the past month, the Zacks Consensus EPS estimate has moved 1.82% higher. Block is currently a Zacks Rank #3 (Hold).

In terms of valuation, Block is currently trading at a Forward P/E ratio of 61.79. This represents a premium compared to its industry's average Forward P/E of 21.93.

Investors should also note that SQ has a PEG ratio of 8.72 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. Technology Services stocks are, on average, holding a PEG ratio of 1.78 based on yesterday's closing prices.

The Technology Services industry is part of the Business Services sector. This group has a Zacks Industry Rank of 169, putting it in the bottom 33% 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.

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


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