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Here's Why Block (SQ) Fell More Than Broader Market

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Block (SQ - Free Report) closed the latest trading day at $78.51, indicating a -1.84% change from the previous session's end. This change lagged the S&P 500's daily loss of 0.95%. Elsewhere, the Dow lost 1.09%, while the tech-heavy Nasdaq lost 0.84%.

Shares of the mobile payments services provider witnessed a loss of 2.12% over the previous month, trailing the performance of the Business Services sector with its loss of 0.45% and the S&P 500's gain of 1.78%.

The upcoming earnings release of Block will be of great interest to investors. The company's earnings report is expected on May 2, 2024. In that report, analysts expect Block to post earnings of $0.62 per share. This would mark year-over-year growth of 55%. Alongside, our most recent consensus estimate is anticipating revenue of $5.72 billion, indicating a 14.65% upward movement from the same quarter last year.

Looking at the full year, the Zacks Consensus Estimates suggest analysts are expecting earnings of $2.97 per share and revenue of $24.64 billion. These totals would mark changes of +65% and +12.43%, respectively, from last year.

Investors should also take note of any recent adjustments to analyst estimates for Block. Such recent modifications usually signify the changing landscape of near-term business trends. Consequently, upward revisions in estimates express analysts' positivity towards the company's business operations and its ability to generate profits.

Our research demonstrates that these adjustments in estimates directly associate with imminent stock price performance. To exploit this, we've formed the Zacks Rank, a quantitative model that includes these estimate changes and presents a viable 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. The Zacks Consensus EPS estimate has moved 9.42% lower within the past month. Block currently has a Zacks Rank of #3 (Hold).

With respect to valuation, Block is currently being traded at a Forward P/E ratio of 26.94. This represents a premium compared to its industry's average Forward P/E of 24.6.

It is also worth noting that SQ currently has a PEG ratio of 0.82. The PEG ratio is akin to the commonly utilized P/E ratio, but this measure also incorporates the company's anticipated earnings growth rate. SQ's industry had an average PEG ratio of 1.7 as of yesterday's close.

The Technology Services industry is part of the Business Services sector. Currently, this industry holds a Zacks Industry Rank of 95, positioning it in the top 38% of all 250+ industries.

The Zacks Industry Rank assesses the vigor of our specific industry groups by computing the average Zacks Rank of the individual stocks incorporated in the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Ensure to harness to stay updated with all these stock-shifting metrics, among others, in the next trading sessions.

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