Assessing PagSeguro Digital (NYSE:PAGS): Is the Stock’s Current Valuation a Hidden Opportunity?

PagSeguro Digital (NYSE:PAGS) continues to capture investor attention following its latest market performance. Over the past month, the stock has slipped 8%, though it remains up more than 5% for the past 3 months.

See our latest analysis for PagSeguro Digital.

The share price momentum for PagSeguro Digital has cooled lately, with the 30-day share price return down 7.6%. However, its year-to-date gain stands tall at nearly 40%. The stock’s 12.3% total return over the past year hints at underlying confidence in its growth prospects, even though investors with a longer time horizon have seen much steeper swings.

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With shares trading at a notable discount to analyst targets and boasting steady revenue and profit growth, the question remains: is PagSeguro Digital still undervalued, or has the market already priced in its future upside?

Most Popular Narrative: 23.5% Undervalued

Compared to its last close at $8.96, the current narrative places PagSeguro Digital's fair value at $11.71, a sizeable premium that highlights strong long-term growth expectations from analysts.

Management’s ambitious strategic plan forecasts compound annual growth of over 10% in gross profit and more than 16% in earnings per share through 2029. These projections support positive long-term growth expectations.

Read the complete narrative.

Want to know the math that justifies this premium? The narrative is built on sustained profit acceleration and a future valuation multiple typically seen among industry leaders. Can you guess which bold growth assumptions are included? Dive in to uncover the surprising drivers behind this target.

Result: Fair Value of $11.71 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, challenges such as higher funding costs or intensified competition from alternatives like PIX could quickly reshape PagSeguro Digital’s growth outlook.

Find out about the key risks to this PagSeguro Digital narrative.

Build Your Own PagSeguro Digital Narrative

If you want to challenge these assumptions, explore the numbers yourself and craft a narrative that fits your perspective in just minutes. Do it your way

A great starting point for your PagSeguro Digital research is our analysis highlighting 4 key rewards and 1 important warning sign that could impact your investment decision.

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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.

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