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Tuesday, September 29, 2020

Investor Confidence is Falling for PagSeguro Digital Ltd. (NYSE:PAGS)

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The PagSeguro Digital Ltd. (PAGS) shares are trading at lower $35.11 and the avg recommendation for the stock is Moderate Buy.

To add more color to this target, the company’s high over the last year is $53.43 and the low is $13.58. Over the last 52 weeks, PAGS is down -34.29% while the S&P 500 is down -0.87%. The catalyst for this interesting swing was the company’s recent earnings report.

A Notable Earnings Report

In the last quarter, PAGS reported a profit of $184.94 million. PagSeguro Digital Ltd. also saw revenues increase to $358.57 million. In addition, PAGS has free cash flow of $185.22 million as of 03-2020. The company’s EBITDA came in at $136.32 million which compares well with its peers.

PAGS booked profit margins of 23.40%, its Return on Equity (ROE) is 18.20%, and its Return on Assets is 10.30%. All told, it is clear that, PAGS needs to be on your watchlist.

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Of course, we must look beyond the financials and question how well those numbers represent the sustainable earnings power of the business. Investors need to know how sustainable this current run. PAGS has a short ratio of 8.09 and outstanding shares of 329.00M.

Company Outlook

PAGS has seen increased volume after this news and investors are putting their support behind the value proposition. Furthermore, 10-day volume stands at 1.68 million and more growth is possible in the weeks ahead. Traders will also note the company’s earnings per share came in at 0.79. PagSeguro Digital Ltd. PAGS also noted assets of $3.27 billion at the end of the last quarter. Investors should also keep an eye on sector updates as PAGS has historically followed its peers on positive news.

All told, PagSeguro Digital Ltd. PAGS has strung together solid data and demonstrated underlying fundamentals. At its current valuation, PAGS represents an interesting risk/reward case. Traders should stay tuned to see if this recent report will push the stock to test recent resistance levels.

PagSeguro Digital Ltd. PAGS is now commanding a market cap of 11.65B and a float of 179.98M. PAGS is increasing its credibility in this sector and that could lead to more upside down the line. Sign-up for continuing coverage on shares of PAGS stock, as well as other hot stock picks, get our free newsletter today and get our next breakout pick!

Disclosure: we hold no position in PAGS, either long or short, and we have not been compensated for this article.

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