PagSeguro Digital Ltd. Increases Yet Falls Behind Market: What Investors Need to Know

PagSeguro Digital Ltd. PAGS closed at $11.85 in the latest trading session, marking a +0.51% move from the prior day. This change lagged the S&P 500's 1.2% gain on the day. At the same time, the Dow added 0.69%, and the tech-heavy Nasdaq gained 1.59%.

Coming into today, shares of the company had lost 15.3% in the past month. In that same time, the Business Services sector lost 6.46%, while the S&P 500 lost 4.16%.

The upcoming earnings release of PagSeguro Digital Ltd. will be of great interest to investors. The company is expected to report EPS of $0.30, up 30.43% from the prior-year quarter. In the meantime, our current consensus estimate forecasts the revenue to be $738.95 million, indicating a 2.37% growth compared to the corresponding quarter of the prior year.

Regarding the entire year, the Zacks Consensus Estimates forecast earnings of $1.29 per share and revenue of $3.26 billion, indicating changes of +18.35% and +1.84%, respectively, compared to the previous year.

It is also important to note the recent changes to analyst estimates for PagSeguro Digital Ltd. These revisions typically reflect the latest short-term business trends, which can change frequently. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Our research shows that these estimate changes are directly correlated with near-term stock prices. To take advantage of this, we've established the Zacks Rank, an exclusive model that considers these estimated changes and delivers an operational rating system.

The Zacks Rank system, which varies between #1 (Strong Buy) and #5 (Strong Sell), carries an impressive track record of exceeding expectations, confirmed by external audits, with stocks at #1 delivering an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.58% higher. As of now, PagSeguro Digital Ltd. holds a Zacks Rank of #1 (Strong Buy).

Digging into valuation, PagSeguro Digital Ltd. currently has a Forward P/E ratio of 9.14. This denotes a discount relative to the industry's average Forward P/E of 14.24.

Investors should also note that PAGS has a PEG ratio of 0.63 right now. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. Financial Transaction Services stocks are, on average, holding a PEG ratio of 1.15 based on yesterday's closing prices.

The Financial Transaction Services industry is part of the Business Services sector. At present, this industry carries a Zacks Industry Rank of 87, placing it within the top 35% of over 250 industries.

The Zacks Industry Rank assesses the strength of our separate industry groups by calculating the average Zacks Rank of the individual stocks contained within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to use Zacks.com to monitor all these stock-influencing metrics, and more, throughout the forthcoming trading sessions.

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