Pagseguro Digital (PAGS – Research Report), the Technology sector company, was revisited by a Wall Street analyst on November 16. Analyst Tito Labarta from Goldman Sachs remains neutral on the stock and has a $7.40 price target.
Tito Labarta has given his Sell rating due to a combination of factors. While Pagseguro Digital’s recurring net income was slightly above expectations, the company’s credit continued to slow, despite a solid increase in deposits. The small and medium-sized business (SMB) segment was the main factor driving the growth of the total payment volume (TPV). However, the company has chosen to focus on revenue growth, which may be affected by the shift from micro-merchants to SMBs.
In addition, Pagseguro Digital’s earnings per share (EPS) growth forecast is lower than its peers, trading at a discount to Stone but a premium to Cielo. While the company has updated its price target upwards due to higher estimates, it still maintains a sell rating. The key upside risks include better growth and monetization at PagBank, execution in the SME segment leading to stronger volume growth, and lower interest rates leading to lower financial expenses and better earnings than expected.
PAGS’s price has also changed moderately for the past six months – from $12.110 to $8.640, which is a -28.65% drop .
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Pagseguro Digital (PAGS) Company Description:
PagSeguro Digital Ltd. engages in the provision of financial technology solutions focused on Micro-Merchants, Small Companies and Medium-Sized Companies, or Small Medium Enterprises. Its business model covers the following pillars: Multiple digital payment solutions; In-person payments via POS devices that sell to merchants; Free digital accounts; Issuer of prepaid cards to clients for spending or withdrawing account balances, and Operating as an acquirer. The company was founded on 2006 and is headquartered in Sau Paulo, Brazil.
Read More on PAGS:
- PagSeguro Digital price target raised to $14 from $13 at HSBC
- PagSeguro Digital options imply 6.0% move in share price post-earnings
- Options Volatility and Implied Earnings Moves Today, November 16, 2023
- PAGS Upcoming Earnings Report: What to Expect?
- PagSeguro Digital price target lowered to $10 from $12 at Barclays
