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Block (SQ) Surges 6.1%: Is This an Indication of Further Gains?

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Block (SQ - Free Report) shares rallied 6.1% in the last trading session to close at $64.40. This move can be attributable to notable volume with a higher number of shares being traded than in a typical session. This compares to the stock's 21.6% loss over the past four weeks.

Block extended its rally, driven by the recent ratings given by Baird and Keybanc on the stock. Both Baird and Keybanc reiterated their ‘Outperform’ rating on SQ even after it suffered from a short-seller attack by Hindenburg.

This mobile payments services provider is expected to post quarterly earnings of $0.32 per share in its upcoming report, which represents a year-over-year change of +77.8%. Revenues are expected to be $4.54 billion, up 14.7% from the year-ago quarter.

While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.

For Block, the consensus EPS estimate for the quarter has been revised 37% lower over the last 30 days to the current level. And a negative trend in earnings estimate revisions doesn't usually translate into price appreciation. So, make sure to keep an eye on SQ going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

Block is a member of the Zacks Technology Services industry. One other stock in the same industry, Vivid Seats Inc. (SEAT - Free Report) , finished the last trading session 0.3% lower at $7.20. SEAT has returned -8.4% over the past month.

Vivid Seats Inc.'s consensus EPS estimate for the upcoming report has changed +3% over the past month to $0.06. Compared to the company's year-ago EPS, this represents a change of +200%. Vivid Seats Inc. currently boasts a Zacks Rank of #3 (Hold).


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