InvestorsObserver gives Square Inc (SQ) a weak valuation score of 1 from its analysis. The proprietary scoring system considers the underlying health of a company by analyzing its stock price, earnings, and growth rate. SQ currently holds a better value than 1% of stocks based on these metrics. Long term investors focused on buying-and-holding should find the valuation ranking system most relevant when making investment decisions.
Metrics Analysis
SQ has a trailing twelve month Price to Earnings (PE) ratio of 387.2. The historical average of roughly 15 shows a poor value for SQ stock as investors are paying higher share prices relative to the company's earnings. SQ's high trailing PE ratio shows that the firm has been trading above its fair market value recently. Its trailing 12-month earnings per share (EPS) of 0.65 does not justify the stock's current price. However, trailing PE ratios do not factor in the company's projected growth rate, resulting in many newer firms having high PE ratios due to high growth potential enticing investors despite inadequate earnings.
SQ has a 12 month forward PE to Growth (PEG) ratio of 36.19. Markets are undervaluing SQ in relation to its projected growth as its PEG ratio is currently below the fair market value of 1. 0.649999976's PEG comes from its forward price to earnings ratio being divided by its growth rate. PEG ratios are one of the most used valuation metrics due to its incorporation of more company fundamentals metrics and a focus on the firm's future rather than its past.
Summary
SQ' has a weak valuation at its current share price on account of a overvalued PEG ratio despite strong growth. SQ's PE and PEG are worse than the market average leading to a below average valuation score.
Click Here to get the full Stock Score Report on Square Inc (SQ) Stock.
