PagSeguro Digital Ltd. (PAGS) Stock Drops Despite Market Gains: Important Facts to Note

In the latest trading session, PagSeguro Digital Ltd. (PAGS) closed at $9.37, marking a -2.8% move from the previous day. The stock trailed the S&P 500, which registered a daily gain of 0.8%. Elsewhere, the Dow gained 0.94%, while the tech-heavy Nasdaq added 0.97%.

The stock of company has risen by 11.06% in the past month, leading the Business Services sector's loss of 0.89% and the S&P 500's gain of 5.12%.

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Analysts and investors alike will be keeping a close eye on the performance of PagSeguro Digital Ltd. in its upcoming earnings disclosure. The company's earnings per share (EPS) are projected to be $0.31, reflecting a 3.13% decrease from the same quarter last year. In the meantime, our current consensus estimate forecasts the revenue to be $892.72 million, indicating a 2.1% growth compared to the corresponding quarter of the prior year.

For the entire fiscal year, the Zacks Consensus Estimates are projecting earnings of $1.26 per share and a revenue of $3.65 billion, representing changes of +4.13% and +4.63%, respectively, from the prior year.

Investors should also take note of any recent adjustments to analyst estimates for PagSeguro Digital Ltd. Such recent modifications usually signify the changing landscape of near-term business trends. Therefore, positive revisions in estimates convey analysts' confidence in the business performance and profit potential.

Our research demonstrates that these adjustments in estimates directly associate with imminent stock price performance. To utilize this, we have created the Zacks Rank, a proprietary model that integrates these estimate changes and provides a functional rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the past month, the Zacks Consensus EPS estimate remained stagnant. At present, PagSeguro Digital Ltd. boasts a Zacks Rank of #2 (Buy).

In terms of valuation, PagSeguro Digital Ltd. is currently trading at a Forward P/E ratio of 7.65. For comparison, its industry has an average Forward P/E of 16.11, which means PagSeguro Digital Ltd. is trading at a discount to the group.

We can also see that PAGS currently has a PEG ratio of 0.68. 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 industry had an average PEG ratio of 1.28 as trading concluded yesterday.

The Financial Transaction Services industry is part of the Business Services sector. Currently, this industry holds a Zacks Industry Rank of 52, positioning it in the top 22% of all 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.

Don't forget to use Zacks.com to keep track of all these stock-moving metrics, and others, in the upcoming trading sessions.

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

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