PagSeguro Digital Ltd. (NYSE:PAGS) First-Quarter Results: Here's What Analysts Are Forecasting For This Year

There's been a notable change in appetite for PagSeguro Digital Ltd. (NYSE:PAGS) shares in the week since its first-quarter report, with the stock down 10% to US$8.95. The result was positive overall - although revenues of R$4.9b were in line with what the analysts predicted, PagSeguro Digital surprised by delivering a statutory profit of R$1.72 per share, modestly greater than expected. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

We've found 21 US stocks that are forecast to pay a dividend yield of over 6% next year. See the full list for free.

After the latest results, the ten analysts covering PagSeguro Digital are now predicting revenues of R$21.4b in 2025. If met, this would reflect a notable 14% improvement in revenue compared to the last 12 months. Statutory per-share earnings are expected to be R$7.17, roughly flat on the last 12 months. Before this earnings report, the analysts had been forecasting revenues of R$21.5b and earnings per share (EPS) of R$6.94 in 2025. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.

View our latest analysis for PagSeguro Digital

There's been no major changes to the consensus price target of US$10.95, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values PagSeguro Digital at US$13.95 per share, while the most bearish prices it at US$4.98. 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.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. We can infer from the latest estimates that forecasts expect a continuation of PagSeguro Digital'shistorical trends, as the 19% annualised revenue growth to the end of 2025 is roughly in line with the 23% annual growth over the past five years. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 5.1% annually. So it's pretty clear that PagSeguro Digital is forecast to grow substantially faster than its industry.

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. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. The consensus price target held steady at US$10.95, with the latest estimates not enough to have an impact on their price targets.

With that in mind, we wouldn't be too quick to come to a conclusion on PagSeguro Digital. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple PagSeguro Digital analysts - going out to 2027, and you can see them free on our platform here.

Before you take the next step you should know about the 2 warning signs for PagSeguro Digital (1 is a bit concerning!) that we have uncovered.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.