PagSeguro Digital Ltd. (PAGS) Stock Sinks As Market Gains: Here's Why

PagSeguro Digital Ltd. (PAGS) closed the most recent trading day at $9.14, moving -2.35% from the previous trading session. The stock's performance was behind the S&P 500's daily gain of 0.62%. Meanwhile, the Dow gained 0.28%, and the Nasdaq, a tech-heavy index, added 1.3%.

Heading into today, shares of the company had gained 4% over the past month, outpacing the Business Services sector's gain of 1.32% and the S&P 500's gain of 2.3%.

Analysts and investors alike will be keeping a close eye on the performance of PagSeguro Digital Ltd. in its upcoming earnings disclosure. The company is predicted to post an EPS of $0.4, indicating a 17.65% growth compared to the equivalent quarter last year. Meanwhile, the latest consensus estimate predicts the revenue to be $1.05 billion, indicating a 17.55% increase compared to the same quarter of the previous year.

PAGS's full-year Zacks Consensus Estimates are calling for earnings of $1.69 per share and revenue of $4.25 billion. These results would represent year-over-year changes of +19.01% and +16.27%, respectively.

It's also important for investors to be aware of any recent modifications 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 business and profitability.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To exploit this, we've formed the Zacks Rank, a quantitative model that includes these estimate changes and presents a viable 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. Over the last 30 days, the Zacks Consensus EPS estimate has moved 0.44% lower. PagSeguro Digital Ltd. currently has a Zacks Rank of #4 (Sell).

Valuation is also important, so investors should note that PagSeguro Digital Ltd. has a Forward P/E ratio of 5.55 right now. For comparison, its industry has an average Forward P/E of 13.6, which means PagSeguro Digital Ltd. is trading at a discount to the group.

Also, we should mention that PAGS has a PEG ratio of 0.46. The PEG ratio is akin to the commonly utilized P/E ratio, but this measure also incorporates the company's anticipated earnings growth rate. The Financial Transaction Services industry had an average PEG ratio of 0.91 as trading concluded yesterday.

The Financial Transaction Services industry is part of the Business Services sector. With its current Zacks Industry Rank of 157, this industry ranks in the bottom 37% of all industries, numbering over 250.

The strength of our individual industry groups is measured by the Zacks Industry Rank, which is calculated based on the average Zacks Rank of the individual stocks within these groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Remember to apply Zacks.com to follow these and more stock-moving metrics during the upcoming trading sessions.

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This article originally published on Zacks Investment Research (zacks.com).

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