Block (SQ) closed the most recent trading day at $76.06, moving +1.85% from the previous trading session. The stock outpaced the S&P 500’s daily gain of 1.42%. Meanwhile, the Dow gained 0.97%, and the Nasdaq, a tech-heavy index, lost 0.07%.
Prior to today’s trading, shares of the mobile payments services provider had gained 21.51% over the past month. This has outpaced the Business Services sector’s gain of 9.42% and the S&P 500’s gain of 6.69% in that time.
Block will be looking to display strength as it nears its next earnings release, which is expected to be August 4, 2022. The company is expected to report EPS of $0.17, down 74.24% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $4.33 billion, down 7.46% from the prior-year quarter.
Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $0.84 per share and revenue of $17.81 billion. These totals would mark changes of -50.88% and +0.83%, respectively, from last year.
Investors might also notice recent changes to analyst estimates for Block. Recent revisions tend to reflect the latest near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company’s business outlook.
Based on our research, we believe these estimate revisions are directly related to near-team stock moves. 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.
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 7.01% lower. Block currently has a Zacks Rank of #3 (Hold).
Investors should also note Block’s current valuation metrics, including its Forward P/E ratio of 88.41. Its industry sports an average Forward P/E of 26.33, so we one might conclude that Block is trading at a premium comparatively.
Meanwhile, SQ’s PEG ratio is currently 7.29. 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. The Technology Services was holding an average PEG ratio of 2.14 at yesterday’s closing price.
The Technology Services industry is part of the Business Services sector. This industry currently has a Zacks Industry Rank of 127, which puts it in the top 50% 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.
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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