PagSeguro Digital Ltd. (NYSE:PAGS) Analysts Are Pretty Bullish On The Stock After Recent Results
It's been a good week for PagSeguro Digital Ltd. (NYSE:PAGS) shareholders, because the company has just released its latest full-year results, and the shares gained 4.0% to US$13.69. Results were roughly in line with estimates, with revenues of R$16b and statutory earnings per share of R$5.10. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
See our latest analysis for PagSeguro Digital
Taking into account the latest results, the most recent consensus for PagSeguro Digital from eight analysts is for revenues of R$17.0b in 2024. If met, it would imply a decent 8.5% increase on its revenue over the past 12 months. Per-share earnings are expected to grow 15% to R$6.01. In the lead-up to this report, the analysts had been modelling revenues of R$16.9b and earnings per share (EPS) of R$5.86 in 2024. So the consensus seems to have become somewhat more optimistic on PagSeguro Digital's earnings potential following these results.
The analysts have been lifting their price targets on the back of the earnings upgrade, with the consensus price target rising 7.3% to US$14.64. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on PagSeguro Digital, with the most bullish analyst valuing it at US$19.96 and the most bearish at US$9.98 per share. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting PagSeguro Digital is an easy business to forecast or the the analysts are all using similar assumptions.
Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that PagSeguro Digital's revenue growth is expected to slow, with the forecast 8.5% annualised growth rate until the end of 2024 being well below the historical 29% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 4.0% annually. So it's pretty clear that, while PagSeguro Digital's revenue growth is expected to slow, it's still expected to grow faster than the industry itself.
The Bottom Line
The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards PagSeguro Digital following these results. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for PagSeguro Digital going out to 2025, and you can see them free on our platform here..
You still need to take note of risks, for example - PagSeguro Digital has 1 warning sign we think you should be aware of.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
