PagSeguro Digital (NYSE:PAGS) sheds R$1.0b, company earnings and investor returns have been trending downwards for past year
Taking the occasional loss comes part and parcel with investing on the stock market. Anyone who held PagSeguro Digital Ltd. (NYSE:PAGS) over the last year knows what a loser feels like. The share price has slid 56% in that time. The silver lining (for longer term investors) is that the stock is still 8.1% higher than it was three years ago. Shareholders have had an even rougher run lately, with the share price down 35% in the last 90 days.
With the stock having lost 11% in the past week, it's worth taking a look at business performance and seeing if there's any red flags.
See our latest analysis for PagSeguro Digital
To quote Buffett, 'Ships will sail around the world but the Flat Earth Society will flourish. There will continue to be wide discrepancies between price and value in the marketplace...' One imperfect but simple way to consider how the market perception of a company has shifted is to compare the change in the earnings per share (EPS) with the share price movement.
Unfortunately PagSeguro Digital reported an EPS drop of 3.8% for the last year. This reduction in EPS is not as bad as the 56% share price fall. Unsurprisingly, given the lack of EPS growth, the market seems to be more cautious about the stock.
The company's earnings per share (over time) is depicted in the image below (click to see the exact numbers).
This free interactive report on PagSeguro Digital's earnings, revenue and cash flow is a great place to start, if you want to investigate the stock further.
A Different Perspective
PagSeguro Digital shareholders are down 56% for the year, but the broader market is up 16%. Of course the long term matters more than the short term, and even great stocks will sometimes have a poor year. Investors are up over three years, booking 2.6% per year, much better than the more recent returns. The recent sell-off could be an opportunity if the business remains sound, so it may be worth checking the fundamental data for signs of a long-term growth trend. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. Case in point: We've spotted 2 warning signs for PagSeguro Digital you should be aware of.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of companies we expect will grow earnings.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.
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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.
