In the latest close session, PagSeguro Digital Ltd. (PAGS) was down 1.22% at $9.75. This move lagged the S&P 500's daily loss of 0.41%. Meanwhile, the Dow lost 1.13%, and the Nasdaq, a tech-heavy index, lost 0.19%.
The company's shares have seen a decrease of 4.55% over the last month, not keeping up with the Business Services sector's gain of 7.24% and the S&P 500's gain of 10.02%.
Market participants will be closely following the financial results of PagSeguro Digital Ltd. in its upcoming release. The company is expected to report EPS of $0.4, up 29.03% from the prior-year quarter. Simultaneously, our latest consensus estimate expects the revenue to be $1.01 billion, showing a 22.01% escalation compared to the year-ago quarter.
For the full year, the Zacks Consensus Estimates are projecting earnings of $1.66 per share and revenue of $4.12 billion, which would represent changes of +16.9% and +12.65%, respectively, from the prior year.
It is also important to note the recent changes to analyst estimates for PagSeguro Digital Ltd. Recent revisions tend to reflect the latest near-term business trends. Therefore, positive revisions in estimates convey analysts' confidence in the business performance and profit potential.
Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.
The Zacks Rank system, ranging from #1 (Strong Buy) to #5 (Strong Sell), possesses a remarkable history of outdoing, externally audited, with #1 stocks returning an average annual gain of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.3% lower. Currently, PagSeguro Digital Ltd. is carrying a Zacks Rank of #3 (Hold).
In terms of valuation, PagSeguro Digital Ltd. is presently being traded at a Forward P/E ratio of 5.94. This valuation marks a discount compared to its industry average Forward P/E of 11.79.
One should further note that PAGS currently holds a PEG ratio of 0.4. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. Financial Transaction Services stocks are, on average, holding a PEG ratio of 0.83 based on yesterday's closing prices.
The Financial Transaction Services industry is part of the Business Services sector. This industry, currently bearing a Zacks Industry Rank of 85, finds itself in the top 35% echelons of all 250+ industries.
The Zacks Industry Rank evaluates the power of our distinct industry groups by determining the average Zacks Rank of the individual stocks forming the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.
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This article originally published on Zacks Investment Research (zacks.com).
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
