Back to top

Image: Bigstock

Here's Why PagSeguro Digital Ltd. (PAGS) Fell More Than Broader Market

Read MoreHide Full Article

In the latest close session, PagSeguro Digital Ltd. (PAGS - Free Report) was down 2.17% at $9.46. The stock's change was less than the S&P 500's daily loss of 1.21%. Elsewhere, the Dow lost 0.97%, while the tech-heavy Nasdaq lost 2.15%.

Heading into today, shares of the company had gained 10.26% over the past month, outpacing the Business Services sector's gain of 3.63% and the S&P 500's gain of 0.42%.

Market participants will be closely following the financial results of PagSeguro Digital Ltd. in its upcoming release. The company's upcoming EPS is projected at $0.4, signifying a 17.65% increase compared to the same quarter of the previous year. Meanwhile, our latest consensus estimate is calling for revenue of $1.05 billion, up 17.55% from the prior-year quarter.

Regarding the entire year, the Zacks Consensus Estimates forecast earnings of $1.69 per share and revenue of $4.25 billion, indicating changes of +19.01% and +16.27%, respectively, compared to the previous year.

Any recent changes to analyst estimates for PagSeguro Digital Ltd. should also be noted by investors. These revisions typically reflect the latest short-term business trends, which can change frequently. Consequently, upward revisions in estimates express analysts' positivity towards the business operations and its ability to generate profits.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 0.44% lower. Currently, PagSeguro Digital Ltd. is carrying a Zacks Rank of #4 (Sell).

In the context of valuation, PagSeguro Digital Ltd. is at present trading with a Forward P/E ratio of 5.73. This denotes a discount relative to the industry average Forward P/E of 11.9.

We can also see that PAGS currently has a PEG ratio of 0.47. 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. The Financial Transaction Services was holding an average PEG ratio of 0.85 at yesterday's closing price.

The Financial Transaction Services industry is part of the Business Services sector. This industry, currently bearing a Zacks Industry Rank of 86, finds itself in the top 35% echelons of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual 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.

Ensure to harness Zacks.com to stay updated with all these stock-shifting metrics, among others, in the next trading sessions.

Published in