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]

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] Investment Opportunities - Companies like Oshkosh Corporation (OSK), EPAM Systems, Inc. (EPAM), Green Dot (GDOT), The Mosaic Company (MOS), and PagSeguro Digital (PAGS) have low P/S ratios and strong growth drivers, making them attractive for investors [4][10] - Each of these companies combines low P/S ratios with strong fundamentals such as innovation, cost control, or digital expansion [10] Company Profiles - **Oshkosh Corporation (OSK)**: Engaged in designing and manufacturing custom-built vehicles, with a focus on electrification and strategic acquisitions to enhance its market presence. Currently holds a Value Score of B and Zacks Rank 1 [12][13] - **EPAM Systems, Inc. (EPAM)**: Provides software engineering and IT consulting services, benefiting from digital transformation and strategic acquisitions. Holds 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 a strong balance sheet and significant cash reserves. Holds 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 in agriculture and cost transformation efforts. Holds a Value Score of A and Zacks Rank 2 [18][20] - **PagSeguro Digital (PAGS)**: Offers a suite of financial solutions in Brazil, focusing on digital banking and sustainable growth. Holds a Value Score of A and Zacks Rank 2 [21][22]

Group 1 - The article discusses the Brazilian payment processor's business model, highlighting its interesting yet potentially maturing aspects [1] - The quarter revealed challenges in two areas of long-only investment, focusing on operational evaluations rather than market-driven dynamics [1] - The analysis emphasizes understanding long-term earnings power and competitive dynamics within the industry, advocating for a buy-and-hold strategy [1] Group 2 - The author has a beneficial long position in the shares of PAGS, indicating a personal investment interest [2] - The article expresses the author's opinions without any compensation from companies mentioned, ensuring an independent viewpoint [2] - There is a clear distinction that past performance does not guarantee future results, underscoring the importance of individual due diligence [3]

Core Viewpoint - PagSeguro, a Brazilian fintech and digital bank, is viewed as a good investment opportunity despite a recent stock sell-off, with strong growth potential and attractive valuation metrics [1][5]. Financial Performance - PagBank's revenue grew by 18% year over year, reaching 5.1 billion reals ($940 million), while profits increased by 7% to 537 million reals ($98.7 million) [3][4]. - Deposits increased by 9% in local currency, and the loan portfolio expanded by 11%, indicating solid growth in a challenging economic environment [4]. Market Valuation - PagSeguro has a market capitalization of $2.8 billion and reported a profit of $405 million over the last 12 months, resulting in a low P/E ratio of approximately 6.9, suggesting the stock is undervalued [5]. - The company offers a modest dividend yield of 1.5%, further enhancing its attractiveness as an investment [6].

Core Insights - PagSeguro Digital Ltd. reported quarterly earnings of $0.34 per share, exceeding the Zacks Consensus Estimate of $0.31 per share, and showing a slight increase from $0.32 per share a year ago, resulting in an earnings surprise of +9.68% [1] - The company posted revenues of $892.74 million for the quarter ended June 2025, which was below the Zacks Consensus Estimate by 0.66%, but an increase from $874.38 million year-over-year [2] - PagSeguro Digital's stock has increased approximately 50.8% since the beginning of the year, significantly outperforming the S&P 500's gain of 10% [3] Earnings Outlook - The company's earnings outlook is crucial for investors, as it includes current consensus earnings expectations for upcoming quarters and any recent changes to these expectations [4] - The trend for estimate revisions prior to the earnings release was favorable, leading to a Zacks Rank 2 (Buy) for the stock, indicating expected outperformance in the near future [6] - Current consensus EPS estimate for the next quarter is $0.31 on revenues of $946.04 million, and for the current fiscal year, it is $1.29 on revenues of $3.66 billion [7] Industry Context - The Financial Transaction Services industry, to which PagSeguro Digital belongs, is currently ranked in the top 35% of over 250 Zacks industries, suggesting a favorable outlook for stocks in this sector [8] - The performance of PagSeguro Digital's stock may also be influenced by the overall industry outlook and trends in earnings estimate revisions [5]

Core Insights - Pagbank reported a net revenue of R$5.1 billion for 2Q25, marking an 18% growth excluding foreign exchange effects, driven by a 61% increase in the banking segment [1][2] - The company achieved a recurring net income of R$565 million (+4% y/y) and a reported net income of R$537 million (+7% y/y), with a return on equity (ROE) of 14.5% [1][3] - Total funding reached R$43 billion (+9% y/y), with deposits at R$37.2 billion (+9% y/y and +10% q/q) and an expanded loan portfolio of R$48 billion (+11% y/y) [3][4] Financial Performance - Gross profit totaled R$1.9 billion, reflecting a 7% year-over-year increase, within the guidance range [1] - Over the past 12 months, Pagbank allocated R$1.9 billion to dividends and share repurchases, with new dividend payments expected in the second half of the year [5] Strategic Outlook - The company maintains an optimistic outlook for the second half of the year, focusing on disciplined business execution and exploring new opportunities [4][6] - Pagbank serves 33 million clients and sees significant growth potential in transactional banking, particularly through Pix, deposits, and credit [6][9] Innovation and Technology - Pagbank is focused on building a comprehensive digital banking platform that simplifies financial management for clients through artificial intelligence and Open Finance [6][10]

Financial Performance - Total revenue for the three-month period ended June 30, 2025, was R$5,058,170, an increase of 11% compared to R$4,556,707 in the same period of 2024[12] - Net income for the six-month period ended June 30, 2025, reached R$1,061,851, representing a 7.6% increase from R$986,192 in the same period of 2024[12] - Basic earnings per common share for the three-month period ended June 30, 2025, was R$1.8031, up from R$1.5785 in the same period of 2024, reflecting a growth of 14.2%[12] - Net income for the six-month period ended June 30, 2025, was R$1,196,154, compared to R$1,150,094 for the same period in 2024, reflecting an increase of 4.0%[18] - The Group's net profit before taxes for the six-month period ended June 30, 2025, was R$1,196,154, compared to R$1,150,094 for the same period in 2024, indicating an increase of approximately 4%[97] - Basic earnings per share for the six-month period ended June 30, 2025, was R$3.5320, compared to R$3.1012 in 2024, indicating an increase of 13.9%[118] Cash and Liquidity - Cash and cash equivalents increased to R$1,128,207 as of June 30, 2025, compared to R$927,668 at the end of 2024, marking a growth of 21.6%[7] - Cash and cash equivalents at the end of the period were R$1,128,207, compared to R$1,374,218 at the end of June 2024, reflecting a decrease of 17.9%[18] - PagSeguro's liquidity risk management includes maintaining reserves and credit lines, with cash and cash equivalents held at R$1,128,207 as of June 30, 2025[148] Assets and Liabilities - Total assets decreased to R$71,193,206 as of June 30, 2025, down from R$72,900,617 at the end of 2024, a decline of 2.3%[10] - Total liabilities decreased to R$56,609,506 as of June 30, 2025, compared to R$58,232,245 at the end of 2024, a reduction of 2.8%[10] - Total financial liabilities decreased to R$54,261,962 as of June 30, 2025, from R$55,643,518 at the end of 2024, showing a reduction of 2.5%[137] - The total amount of taxes and contributions decreased to R$684,991 as of June 30, 2025, from R$706,076 on December 31, 2024, reflecting a decline of approximately 3%[83] Equity and Shareholder Returns - Total equity as of June 30, 2025, was R$14,583,700, slightly down from R$14,668,372 at the end of 2024, a decrease of 0.6%[10] - The company paid dividends totaling R$236,037 during the six-month period ended June 30, 2025, marking its commitment to returning value to shareholders[18] - The company declared a dividend of US$0.14 per common share on May 13, 2025, totaling R$236,037, with R$141,117 allocated to third-party shareholders[116] Borrowings and Financial Costs - Borrowings for the six-month period ended June 30, 2025, were R$4,748,000, compared to R$2,398,160 in 2024, showing an increase of 97.9%[18] - The total borrowings as of June 30, 2025, were R$1,016,353 thousand due within 30 days, compared to R$2,540,481 thousand on December 31, 2024, indicating a significant reduction[159] - Financial costs for the six-month period ended June 30, 2025, were R$2,457,346, up from R$1,690,554 in 2024, representing an increase of 45.3%[124] Accounts Receivable and Credit Management - The company reported a decrease in accounts receivable to R$55,643,579 as of June 30, 2025, from R$57,628,538 at the end of 2024, a decline of 3.4%[7] - The total accounts receivable as of June 30, 2025, amounted to R$57,994,169, a decrease from R$59,803,273 as of December 31, 2024[43] - The expected credit losses (ECL) for accounts receivable increased to R$294,345 as of June 30, 2025, compared to R$284,620 at the end of 2024, reflecting a rise of 3.0%[45] - Past due accounts receivable rose to R$304,101 as of June 30, 2025, up from R$272,294 on December 31, 2024, indicating an increase of 11.7%[46] Operational Expenses - The total expenses for the six-month period ended June 30, 2025, were R$8,712,172, compared to R$7,713,038 in 2024, reflecting an increase of 12.9%[124] - The company incurred shared service costs of R$54,951 for the six-month period ended June 30, 2025, compared to R$55,691 for the same period in 2024, showing a marginal decrease[56] Strategic Initiatives - The company authorized a share repurchase program of up to US$200 million in August 2024, which was completed in May 2025, totaling US$200 million in Class A common shares repurchased[112] - PagSeguro Group operates in a single segment as financial service agents, with all strategic decisions made on a consolidated basis[36] Risk Management - The company has established a Credit Committee to assess the risk levels of card issuers, classifying them into three risk categories[146] - PagSeguro's exposure to foreign exchange risk is primarily related to POS purchases in various countries, with hedging strategies in place for revenues in foreign currencies[141] - The Group's strategy includes managing risks through derivative financial instruments to hedge against fluctuations in foreign currency and interest rates[165]

The market expects PagSeguro Digital Ltd. (PAGS) to deliver a year-over-year decline in earnings on higher revenues when it reports results for the quarter ended June 2025. This widely-known consensus outlook is important in assessing the company's earnings picture, but a powerful factor that might influence 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 t ...

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] Investment Opportunities - Low P/S stocks can offer compelling opportunities for growth at a discount, especially when combined with strong fundamentals and positive business momentum [3][10] - Companies such as Janus Henderson Group plc (JHG), The Greenbrier Companies, Inc. (GBX), Precision Drilling (PDS), The Mosaic Company (MOS), and PagSeguro Digital (PAGS) have low P/S ratios and potential for higher returns [4][10] Company Profiles - **Janus Henderson Group plc (JHG)**: A global asset management firm with a strong balance sheet and positive net inflows, positioned for long-term value creation [13] - **The Greenbrier Companies, Inc. (GBX)**: A leading supplier in freight transportation markets, benefiting from strong market demand and a profitable leasing business [15] - **Precision Drilling (PDS)**: An oilfield services company with a positive outlook supported by U.S. drilling activity and strategic expansions [17] - **The Mosaic Company (MOS)**: A major producer of phosphate and potash, experiencing strong demand and improving cost structures [20] - **PagSeguro Digital (PAGS)**: A financial services provider in Brazil, enhancing its digital banking platform and focusing on sustainable growth [22]

Company Performance - PagSeguro Digital Ltd. ended the recent trading session at $8.16, showing a +1.75% change from the previous day's closing price, outperforming the S&P 500's daily gain of 0.4% [1] - The company experienced a loss of 14.41% over the previous month, underperforming the Business Services sector, which saw a loss of 0.55%, and the S&P 500, which gained 4.61% [1] Upcoming Earnings - PagSeguro Digital Ltd. is expected to report an EPS of $0.31, reflecting a 3.13% decline compared to the same quarter last year [2] - The consensus estimate for revenue is projected at $898.63 million, indicating a 2.77% increase compared to the same quarter of the previous year [2] Fiscal Year Projections - For the entire fiscal year, earnings are projected at $1.29 per share and revenue at $3.66 billion, representing changes of +6.61% and +4.8% respectively from the prior year [3] - Recent changes to analyst estimates indicate optimism regarding the business and profitability [3] Valuation Metrics - PagSeguro Digital Ltd. is currently traded at a Forward P/E ratio of 6.22, which is a discount compared to the industry average Forward P/E of 15.81 [6] - The company has a PEG ratio of 0.55, which is lower than the average PEG ratio of 1.38 for Financial Transaction Services stocks [7] Industry Context - The Financial Transaction Services industry, part of the Business Services sector, has a Zacks Industry Rank of 159, placing it in the bottom 36% of all industries [8] - The Zacks Industry Rank assesses the strength of industry groups, with top-rated industries outperforming the bottom half by a factor of 2 to 1 [8]