The shares of Square, Inc. (NYSE:SQ) and Cronos Group Inc. (NASDAQ:CRON) were among the active stocks of the last trading sessions. Square, Inc. (NYSE:SQ) soared to 6.96% closing at the price of $82.69 whereas the shares of Cronos Group Inc. (NASDAQ:CRON) soared 8.4% with the increase of 0.76 points closing at the price of $9.81. Square, Inc. has currently increase 51.31% in its stock over the period of 6-months while its rival Cronos Group Inc. added 75.18% in the previous 6-months.
Now we have to analyze the facts that if the stocks were worthy off investors’ money? The facts to analyze here are risks, profitability, returns and price trends.
Returns and Profitability
Profitability and returns are the main reason of investment, the investors are looking for profits that they get and return they should expect over the period of time.
The first and foremost return that is considered while making an investment is the ROI or Return on Investment. The ROI is the ratio between the profit against the cost of investment. Currently the ROI of Square, Inc. (NYSE:SQ) is -4.8% while the ROI of Cronos Group Inc. (NASDAQ:CRON) is 0%. Another figure that is to be considered while analyzing the profitability of a share is its EBITDA margin, SQ’s EBITDA Margin is -2377.15 whereas CRON’s is -627110.5.
Both the profitability ratios suggest a mixed sentiment for Square, Inc. (NYSE:SQ) and Cronos Group Inc. (NASDAQ:CRON).
EPS & Surprise Factor
Technical Analysis of Square, Inc. & Cronos Group Inc.
Moving average convergence divergence (MACD) shows that Square, Inc. (NYSE:SQ) is on a PRICE RELATIVITY trend While Cronos Group Inc. (NASDAQ:CRON) is on PRICE RELATIVITY trend. The trend for the past 10-days shows that the Square, Inc. was in BULLISH territory and Cronos Group Inc. was in BULLISH territory.
SQ’s current statistics gauge that the stock candle is BULLISH with HIGH volatility. While CRON’s candle is BEARISH with MEDIUM.
EPS Growth Rate: SQ’s 54.04% versus CRON’s 0%
Another shareholder value can be analyzed through the EPS growth rate; the next 5 years EPS growth rate is predicted by the analysts after the analyzing the previous trends. The next 5 year EPS growth rate of Square, Inc. (NYSE:SQ) is predicted at 54.04% while Cronos Group Inc. (NASDAQ:CRON) stands at 0%. These numbers suggest that SQ is more suitable investment in terms of EPS growth rate.
Financial Risk and Liquidity Concerns
The current ratio and the debt ratio are the two ratios that show the investor how quickly the company is able to payout its debt and how quickly it can cover its obligations. The current ratio of SQ stands at 2.2 while CRON is at 0 whereas the debt ratio of the prior is 0.99 while the debt ratio of the later is 0.
The values of the both ratios suggest that SQ is more suitable investment when the liquidity and risk is the main concern.
While making an investment, another main factor to consider before investing is the analyst recommendation on the scale of 1 to 5 where 1 is strong buy, 2 is buy, 3 is hold, 4 is Sell and 5 is strong sell. Analyst recommend 2.5 for SQ and 0 for CRON which means SQ has Hold rating whereas CRON has Strong Buy rating.
Valuation is the process of determining the company’s worth for an investor, the valuation ratios give an insight to that worthiness.
SQ currently has price to earning P/E ratio of 0 whereas CRON has 981 while the forward P/E ratio for the prior stands at 106.56 and for the later it depicts the value of 0.
The price to Book P/B for SQ is 30.85, Price to Sale is at 12.48 and for CRON these ratios stand at 10.16 and 249.55.