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Block (SQ) Stock Sinks As Market Gains: What You Should Know

In the latest trading session, Block (SQ) closed at $64.94, marking a -0.23% move from the previous day. This change lagged the S&P 500's daily gain of 0.12%. At the same time, the Dow added 0.13%, and the tech-heavy Nasdaq lost 4.09%.

Coming into today, shares of the mobile payments services provider had gained 13.57% in the past month. In that same time, the Business Services sector gained 2.4%, while the S&P 500 gained 3.98%.

Investors will be hoping for strength from Block as it approaches its next earnings release. The company is expected to report EPS of $0.37, up 105.56% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $5.1 billion, up 15.69% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $1.72 per share and revenue of $20.59 billion, which would represent changes of +72% and +17.43%, respectively, from the prior year.

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Investors should also note any 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.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. 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 23.21% higher. Block is currently a Zacks Rank #3 (Hold).

Valuation is also important, so investors should note that Block has a Forward P/E ratio of 37.94 right now. For comparison, its industry has an average Forward P/E of 24.5, which means Block is trading at a premium to the group.

It is also worth noting that SQ currently has a PEG ratio of 1.9. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Technology Services was holding an average PEG ratio of 1.74 at yesterday's closing price.

The Technology Services industry is part of the Business Services sector. This group has a Zacks Industry Rank of 105, putting it in the top 42% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.

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Block, Inc. (SQ) : Free Stock Analysis Report

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Zacks Investment Research