Wall Street expects a year-over-year increase in earnings on higher revenues when PagSeguro Digital Ltd. (PAGS) reports results for the quarter ended December 2025. While this widely-known consensus outlook is important in gauging the company's earnings picture, a powerful factor that could impact its near-term stock price is how the actual results compare to these estimates.The stock might move higher if these key numbers top expectations in the upcoming earnings report. On the other hand, if they miss, th ...

Company Performance - PagSeguro Digital Ltd. closed at $11.17, reflecting a -1.24% change from the previous day, which is less than the S&P 500's daily loss of 0.01% [1] - Prior to the latest trading session, the company's shares had gained 11.65%, outperforming the Business Services sector's loss of 7% and the S&P 500's loss of 0.28% [1] Upcoming Earnings - The company is expected to report an EPS of $0.42, representing a 23.53% increase compared to the same quarter last year [2] - Revenue is anticipated to be $1.02 billion, indicating a 16.84% rise from the same quarter last year [2] Annual Forecast - Zacks Consensus Estimates project earnings of $1.46 per share and revenue of $3.85 billion for the year, reflecting increases of +20.66% and +10.25% respectively compared to the previous year [3] Analyst Estimates - Recent changes to analyst estimates for PagSeguro Digital Ltd. indicate evolving short-term business trends, with positive revisions suggesting analyst optimism regarding the company's profitability [3] Valuation Metrics - The company has a Forward P/E ratio of 6.84, which is below the industry average of 11.71 [6] - PagSeguro Digital Ltd. has a PEG ratio of 0.47, compared to the Financial Transaction Services industry's average PEG ratio of 1.03 [6] Industry Context - The Financial Transaction Services industry, part of the Business Services sector, holds a Zacks Industry Rank of 140, placing it in the bottom 43% of over 250 industries [7] - Research indicates that the top 50% rated industries outperform the bottom half by a factor of 2 to 1 [7]

Group 1 - PagSeguro Digital Ltd. (NYSE:PAGS) is considered one of the most undervalued fintech stocks, with expectations of a quarterly revenue of approximately $981.30 million and an EPS of $0.39 for fiscal Q4 2025 [1] - Bank of America Securities has reiterated a Buy rating on PAGS with a price target of $13, highlighting the strategic initiatives of the newly appointed CEO and CFO to significantly increase the company's loan book by 2029 [2] - The new management team brings retail banking expertise and has enhanced credit models and collection capabilities, while also utilizing AI to expedite credit underwriting processes [3] Group 2 - PagSeguro Digital Ltd. primarily serves consumers, individual entrepreneurs, micro-merchants, small companies, and medium-sized companies in Brazil, focusing on financial services and digital payments [3]

Core Thesis - PagSeguro Digital Ltd. (PAGS) is viewed positively due to its strong historical growth, low valuation metrics, and potential upside from interest rate cuts, making it an attractive investment opportunity [1][2][3]. Financial Performance - PagSeguro has demonstrated impressive historical growth with a net income CAGR of 15% and revenue CAGR of 27% from 2018 to 2024 [2]. - The stock trades at a trailing P/E of 7.69 and a forward P/E of 6.98, indicating a significant margin of safety [1][2]. - The company maintains a robust cash position of approximately $1.8 billion, with a Basel Ratio of 30% and a return on average equity (ROAE) of around 14-15% [3]. Future Outlook - Management anticipates net income growth of 11-15% in 2025 and expects an EPS CAGR of over 16% and gross profit CAGR of over 10% through 2029 [3]. - A 1% decrease in Brazilian interest rates could potentially increase annual pre-tax profits by about $60 million, highlighting the sensitivity of profitability to interest rate changes [3]. Capital Returns - The company has been actively returning capital to shareholders through buybacks and dividends, with an expected total capital return yield of 16% in 2026 [3]. Competitive Landscape - PagSeguro faces competition from banks, fintechs, and Brazil's instant payment system, PIX, which may impact fee income and the demand for prepayment services [4]. - Despite a slight decline in market share in payment processing due to fee repricing, PagSeguro benefits from a broad service ecosystem and the strategic backing of UOL, which holds 85% of voting power [4]. Recent Performance - The stock has appreciated approximately 23.87% since a previous bullish thesis was published, indicating that the positive outlook remains valid [5].

Group 1 - Middle Coast Investing reported a strong performance in 2025, with the S&P 500 showing a 21.2% annualized return over the past three years, indicating signs of slowing growth [1] - In Q4 2025, the US Portfolios returned 2.7%, outperforming the S&P 500's return of 2.3%, while Core U.S. portfolios returned 1.9% [1] - The European Portfolios experienced a decline of -0.4% in the same quarter [1] Group 2 - PagSeguro Digital Ltd. (NYSE:PAGS) was highlighted as a key stock, closing at $10.13 per share on January 13, 2026, with a one-month return of 8.46% and a 52-week gain of 46.39% [2] - PagSeguro Digital Ltd. has a market capitalization of $2.957 billion [2] - The firm emphasized a strategy of diversifying from US holdings, indicating a focus on non-US stocks, with PagSeguro being a notable addition to the portfolio [3]

Company Performance - PagSeguro Digital Ltd. (PAGS) stock decreased by 2.88% to $10.13, which is less than the S&P 500's daily loss of 0.19% [1] - Over the past month, the stock has increased by 4.09%, outperforming the Business Services sector's loss of 0.17% and the S&P 500's gain of 2.26% [1] Earnings Expectations - Analysts expect PagSeguro to report earnings of $0.42 per share, reflecting a year-over-year growth of 23.53% [2] - Revenue is anticipated to be $1.02 billion, indicating a 16.51% increase compared to the same quarter last year [2] Full Year Projections - For the full year, earnings are projected at $1.44 per share, representing a growth of 19.01%, while revenue is expected to remain flat at $3.81 billion [3] Analyst Estimates - Recent modifications to analyst estimates indicate a dynamic business outlook, with positive revisions suggesting optimism [4] - The consensus EPS projection has decreased by 1.37% in the past 30 days, and PagSeguro currently holds a Zacks Rank of 3 (Hold) [6] Valuation Metrics - PagSeguro is trading at a Forward P/E ratio of 6.44, which is below the industry average Forward P/E of 13.33 [7] - The company has a PEG ratio of 0.44, compared to the Financial Transaction Services industry average PEG ratio of 0.99 [8] Industry Context - The Financial Transaction Services industry, part of the Business Services sector, has a Zacks Industry Rank of 194, placing it in the bottom 21% of over 250 industries [9]

Company Performance - PagSeguro Digital Ltd. closed at $9.62, reflecting a decrease of 2.83% from the previous day, underperforming compared to the S&P 500's loss of 0.34% [1] - Over the last month, the company's shares have decreased by 0.1%, while the Business Services sector gained 2.46% and the S&P 500 gained 1.19% [1] Earnings Projections - PagSeguro Digital Ltd. is projected to report earnings of $0.39 per share, indicating a year-over-year growth of 14.71%, with quarterly revenue expected to reach $1 billion, up 14.8% from the previous year [2] - Full-year Zacks Consensus Estimates predict earnings of $1.36 per share and revenue of $3.77 billion, representing year-over-year changes of +12.4% for earnings and 0% for revenue [3] Analyst Estimates and Valuation - Recent changes to analyst estimates suggest a favorable outlook on the company's business health and profitability, with a Zacks Rank of 3 (Hold) currently [3][5] - The Forward P/E ratio for PagSeguro Digital Ltd. is 6.56, which is a discount compared to the industry average of 12.8 [6] - The company has a PEG ratio of 0.45, significantly lower than the Financial Transaction Services industry's average PEG ratio of 0.93 [7] Industry Context - The Financial Transaction Services industry, part of the Business Services sector, has a Zacks Industry Rank of 171, placing it in the bottom 31% of over 250 industries [8] - Research indicates that the top 50% rated industries outperform the bottom half by a factor of 2 to 1 [8]

Group 1 - The analyst has over a decade of experience researching various companies across different sectors, including commodities like oil, natural gas, gold, and copper, as well as technology firms such as Google and Nokia [1] - The analyst has transitioned from writing a blog to creating a value investing-focused YouTube channel, where extensive research on hundreds of companies has been conducted [1] - The analyst expresses a particular interest in covering metals and mining stocks, while also being comfortable with other industries such as consumer discretionary/staples, REITs, and utilities [1]

Group 1 - The article does not provide any specific content related to a company or industry [1]

Core Insights - PagBank reported strong financial results for the third quarter of 2025, showcasing resilience in a high-interest-rate environment and economic slowdown [2][4] - The bank's recurring net income reached BRL 571 million, with net revenue growing by 14.4% year-over-year to BRL 3.4 billion [4] - Deposits increased to BRL 39.4 billion, reflecting a 15.3% year-over-year growth, while the loan portfolio expanded to BRL 4.2 billion, marking a 29.9% year-over-year increase [5] Financial Performance - Recurring net income for 3Q25 was BRL 571 million [4] - Net revenue grew 14.4% year-over-year, totaling BRL 3.4 billion [4] - Deposits reached BRL 39.4 billion, up 15.3% year-over-year and 6.1% quarter-over-quarter [5] - The loan portfolio amounted to BRL 4.2 billion, with a year-over-year growth of 29.9% and a quarter-over-quarter increase of 7.2% [5] Strategic Initiatives - The bank distributed over BRL 2 billion to shareholders through dividends and share repurchases in the last 12 months [3] - PagBank is focusing on higher-margin products and sustainable value creation while expanding its revenue and optimizing its capital structure [2] - The bank aims to deepen relationships with entrepreneurs and consumers, enhancing access to financial solutions for millions of Brazilians [6] Leadership Changes - Carlos Mauad will become the new CEO of PagBank starting January 1, 2026, as part of a planned succession process [7] - Gustavo Sechin will take over as the new CFO [7] - The transition is expected to ensure continuity and support for the bank's growth strategy [8][9]