Core Insights - PagSeguro Digital Ltd. (NYSE:PAGS) is identified as one of the best cheap rising stocks to invest in currently, despite Morgan Stanley maintaining an Underweight rating while increasing the price target from $5 to $7 [1][2] Financial Projections - Morgan Stanley has raised PagSeguro's 2025 GAAP net income expectation to R$2,369 million, an increase from the previous projection of R$2,029 million [2] - For 2026, PagSeguro's GAAP net income is expected to reach R$2,476 million, up from R$2,012 million previously [2] Company Overview - PagSeguro Digital Ltd. is a Brazilian financial technology company that provides a fully integrated digital banking and payment platform [2]

Core Insights - Investing in stocks based on valuation metrics, particularly the price-to-sales (P/S) ratio, can identify opportunities with strong upside potential, especially for unprofitable or early-stage companies [1][2][3] Valuation Metrics - The P/S ratio compares a company's market capitalization to its revenues, providing a clearer picture of value when earnings are minimal or volatile [2][5] - A P/S ratio below 1 indicates a good bargain, as investors pay less than a dollar for each dollar of revenue generated [6] - The P/S ratio is preferred over the price-to-earnings (P/E) ratio due to the difficulty of manipulating sales figures compared to earnings [7][10] Investment Opportunities - Low P/S stocks can offer compelling opportunities, often trading below their intrinsic value, making them attractive for investors seeking upside potential [3][10] - Companies with low P/S ratios identified as potential investment opportunities include: - Macy's Inc. (M) [4][12] - Oshkosh Corporation (OSK) [4][14] - Green Dot (GDOT) [4][16] - The Mosaic Company (MOS) [4][18] - PagSeguro Digital (PAGS) [4][20] Company Profiles - **Macy's Inc. (M)**: Undergoing a transformation with its Bold New Chapter program, focusing on digital initiatives and omnichannel retailing, currently has a Value Score of A and Zacks Rank 1 [12][13] - **Oshkosh Corporation (OSK)**: Engaged in custom-built vehicles and equipment, focusing on electrification and innovation, currently has a Value Score of B and Zacks Rank 2 [14][15] - **Green Dot (GDOT)**: A leader in prepaid cards and Banking-as-a-Service, with strong partnerships and a solid balance sheet, currently has a Value Score of A and Zacks Rank 1 [16][17] - **The Mosaic Company (MOS)**: A major producer of phosphate and potash, benefiting from strong demand and cost transformation efforts, currently has a Value Score of A and Zacks Rank 2 [18][19] - **PagSeguro Digital (PAGS)**: Offers a suite of financial solutions in Brazil, focusing on digital banking and innovation, currently has a Value Score of B and Zacks Rank 1 [20][21]

Core Insights - The article discusses the importance of a hybrid investment strategy that combines growth and value investing principles, particularly in uncertain market conditions [1][3][5]. GARP Investment Strategy - GARP (Growth at a Reasonable Price) investing merges growth and value investing, focusing on stocks that are undervalued yet have sustainable growth potential [2][3]. - The PEG (Price/Earnings Growth) ratio is a key metric for GARP investors, helping to identify stocks with solid future potential by relating P/E ratios to future earnings growth rates [5][6]. Stock Performance and Selection Criteria - Several stocks have shown significant success using the GARP strategy, including Micron Technology, StoneCo, PagSeguro Digital, and Daktronics [4][11][13][15][17]. - Stocks selected for GARP investment should meet specific criteria, such as a PEG ratio less than the industry median, a P/E ratio below the industry median, and a Zacks Rank of 1 (Strong Buy) or 2 (Buy) [8][10]. Individual Stock Analysis - **Micron Technology (MU)**: A leading provider of semiconductor memory solutions with a long-term expected growth rate of 28.5% and a Zacks Rank of 1 [11][12]. - **StoneCo (STNE)**: A Brazilian fintech company with a long-term expected growth rate of 30.3% and a Zacks Rank of 2 [13][14]. - **PagSeguro Digital (PAGS)**: Offers a range of financial services with a long-term expected growth rate of 14.2% and a Zacks Rank of 1 [15][16]. - **Daktronics (DAKT)**: Specializes in electronic displays with a historical growth rate of 59.5% and a Zacks Rank of 1 [17][18].

Core Viewpoint - PagSeguro Digital Ltd. (PAGS) is experiencing solid improvement in earnings estimates, which may lead to continued stock price momentum [1][2]. Earnings Estimate Revisions - The rising trend in estimate revisions reflects growing analyst optimism regarding PagSeguro's earnings prospects, which is expected to positively impact its stock price [2]. - For the current quarter, PagSeguro is expected to earn $0.35 per share, representing a year-over-year increase of +9.4%. The Zacks Consensus Estimate has increased by 14.95% due to one upward revision and no negative revisions in the last 30 days [6]. - For the full year, the earnings estimate stands at $1.38 per share, indicating a +14.1% change from the previous year. Over the past month, two estimates have moved higher, contributing to a 7.17% increase in the consensus estimate [7][8]. Zacks Rank and Performance - PagSeguro Digital has achieved a Zacks Rank 1 (Strong Buy) due to favorable estimate revisions, which historically correlate with significant outperformance compared to the S&P 500 [9]. - Stocks with a Zacks Rank 1 have generated an average annual return of +25% since 2008, indicating strong potential for PagSeguro [3]. Stock Performance - The stock has increased by 18.7% over the past four weeks, driven by strong estimate revisions and positive investor sentiment, suggesting further upside potential [10].

Core Points - PagSeguro Digital held a strategic update call to discuss its recent developments and future outlook [1] - The presentation materials for the call are accessible on the company's Investor Relations website [1] Group 1 - The call was led by Gustavo Sechin, the Head of Investor Relations [2]

Pagbank (NYSE:PAGS) Strategic Update Call Summary Company Overview - **Company**: Pagbank (PagSeguro Digital) - **Date**: September 18, 2025 - **Key Speakers**: Gustavo Sequin (IR Director), Ricardo Dutra (CEO), Alessandra Mayani (CEO), Artur Schunk (CFO), Carlos Malad (COO) Core Industry and Company Insights - **Industry**: Digital Banking and Financial Services in Brazil - **Market Position**: Pagbank aims to transition from a payments company to a full digital bank, integrating payments, banking, and credit services [6][7][10] Key Points and Arguments 1. **Innovation and Growth Strategy**: - Innovation is central to Pagbank's strategy, focusing on technology and customer satisfaction [5][6] - The company has a strong reputation with over 33 million customers, positioning itself as a growth partner for individuals and businesses [7][10] 2. **Financial Performance**: - Earnings per share (EPS) have shown a 15% compound annual growth rate (CAGR) since the IPO [10][45] - The company is focused on creating shareholder value through strategic initiatives and capital optimization [10][17] 3. **Growth Opportunities**: - The Brazilian financial market is highly concentrated, with Pagbank holding a low share in banking and credit metrics, indicating significant growth potential [11][12] - The company plans to scale its credit portfolio significantly, targeting a growth from BRL 4 billion to BRL 25 billion by 2029 [18][24] 4. **Credit Portfolio Strategy**: - The credit portfolio will shift towards more unsecured products, with a focus on working capital loans and payroll loans [26][40] - The company is developing AI-powered credit solutions to enhance risk management and customer experience [19][81] 5. **Capital Structure and Shareholder Returns**: - Pagbank plans to return over BRL 5.5 billion to shareholders by 2026, with BRL 3.8 billion in distributions expected between 2025 and 2026 [17][18] - The target capital ratio is set between 18% to 22%, ensuring financial strength and flexibility for growth [17][63] 6. **Market Dynamics**: - The Brazilian payments sector is expected to grow in the low double digits, driven by fixed transactions and e-commerce [14][15] - Pagbank aims to capture a larger market share in online payments, particularly in the e-commerce and cross-border segments [15][16] 7. **Long-term Goals**: - By 2029, Pagbank targets a credit portfolio of BRL 25 billion, with a balanced mix of secured and unsecured products [18][19] - The company anticipates a gross profit CAGR of over 10% and an EPS CAGR of over 16% from 2025 to 2029 [19][20] Additional Important Insights - **Market Penetration**: Brazil's low per capita consumption indicates untapped demand in the credit market, presenting a clear opportunity for Pagbank [13][19] - **Customer Engagement**: The integrated approach of offering a comprehensive suite of services enhances customer engagement and lifetime value [8][10] - **Macroeconomic Considerations**: The company acknowledges potential macroeconomic challenges, including interest rates and political factors, that may impact growth [70][71] Conclusion Pagbank is strategically positioned to leverage its innovative capabilities and customer base to capture significant growth opportunities in the Brazilian digital banking and credit markets. The focus on capital optimization and shareholder returns, combined with a robust growth strategy, sets a positive outlook for the company's future performance.

Strategic Positioning & Business Overview - PagSeguro aims to transform and democratize access to financial services and payment solutions in Brazil [16] - PagSeguro's platform has led to Deposits/Funding of R$ 43 billion in Q2 2025 [25] - The company focuses on unlocking value through an integrated financial ecosystem encompassing payments and banking [29] Market and Growth Opportunities - PagBank has a 15.6% market share in active merchants, equating to 6.3 million [43] - PagBank has a 10.2% market share in active banking clients, totaling 17.3 million [43] - PagBank accounts for 9.4% of PIX transactions, representing 6.0 billion transactions [43] - PagBank accounts for 1.4% of PIX volume, which is R$ 430 billion [43] - Brazil's payment sector is expected to grow by approximately 10% annually, driven by a 15% growth in PIX and 8% in card transactions [51] Capital Optimization & Long-Term Goals - PagSeguro plans to return over R$ 5.5 Billion to shareholders, with R$ 3.8 Billion expected between 2025 and 2026 [65] - The company targets a BIS (Bank for International Settlements) ratio between 18% and 22% [70, 73] - PagSeguro aims for a credit portfolio of R$ 25 Billion by December 2029 [80] - PagSeguro targets a gross profit CAGR (Compound Annual Growth Rate) of over 10% from 2025 to 2029 [80]

Group 1 - PagSeguro Digital Ltd. (NYSE:PAGS) experienced a significant increase in share prices, reaching a new 52-week high of $10.78, before closing up by 10.72% at $10.74 [1] - The company is expected to provide updates during an investor call scheduled for September 17, which has generated investor interest [2] - PagSeguro announced a special cash dividend of $0.12 per share, to be distributed on November 3, 2025, with an expectation of a similar distribution in the next two quarters [2][3]

Core Insights - As of September 17, 2025, three stocks in the financial sector are identified as potentially overbought, which may concern momentum-focused investors [1][2]. Company Summaries - **PagSeguro Digital Ltd (PAGS)**: Reported net revenue of R$5.1 billion and recurring net income of R$565 million for Q2 2025. The stock has gained approximately 19% over the past month, with a 52-week high of $10.78. The RSI value is 82.4, indicating overbought conditions. The stock closed at $10.74, with a momentum score of 58.79 and a value score of 95.74 [7]. - **Credicorp Ltd (BAP)**: UBS analyst raised the price target from $257 to $318, maintaining a Buy rating. The stock has increased around 7% over the past month, reaching a 52-week high of $33.17. The RSI value is 71.7, and the stock closed at $270.79 [7]. - **Galaxy Digital Inc (GLXY)**: The stock gained approximately 3.4% to close at $31.83. The RSI value is 71.7, indicating it is nearing overbought territory [7].

Group 1 - Momentum investing focuses on "buying high and selling higher" rather than traditional strategies of "buying low and selling high" [1] - Fast-moving trending stocks can be risky if their valuations exceed future growth potential, leading to potential losses for investors [2] - Investing in bargain stocks that have recently shown price momentum can be a safer strategy, utilizing tools like the Zacks Momentum Style Score [3] Group 2 - PagSeguro Digital Ltd. (PAGS) has shown a price increase of 5.7% over the past four weeks, indicating growing investor interest [4] - PAGS has gained 6% over the past 12 weeks and has a beta of 1.56, suggesting it moves significantly faster than the market [5] - PAGS has a Momentum Score of A, indicating a favorable time to invest based on its momentum characteristics [6] Group 3 - PAGS has received a Zacks Rank 2 (Buy) due to upward revisions in earnings estimates, which attract more investor interest [7] - The stock is trading at a Price-to-Sales ratio of 0.91, indicating it is reasonably valued at 91 cents for each dollar of sales [7] - PAGS is positioned for significant growth potential while maintaining a fast pace [8] Group 4 - There are additional stocks that meet the criteria of the 'Fast-Paced Momentum at a Bargain' screen, suggesting further investment opportunities [8] - Zacks offers over 45 Premium Screens tailored to different investing styles, aiding in stock selection [9]