PagSeguro Digital Ltd (PAGS) is approaching a resistance level, and if surpassed the stock could breakout…
PagSeguro Digital Ltd (PAGS) is a Brazilian-based company which acts as a provider of financial technology solutions focused primarily on Micro-Merchants, Small Companies, and Medium-Sized Companies, in Brazil. The company provides a range of solutions and tools such as cash-in and cash-out options and provides access to working capital and to help to manage their cash flow.
The company had a strong third quarter, with earnings up 233.3% year over year. PAGS is seeing positive trends in terms of engagement, new clients added, and electronic payments volumes. The company also reached their all-time high absolute TPV, and historical records in net new additions for both merchants and Pagbank users.
PAGS had $450 million in cash as of the end of the quarter, which was down from the previous quarter, but up year over year. It has a current ratio of 1.9, indicating it has enough liquidity to handle short-term obligations. The company also has a solid profit margin of 21.2%.
Growth looks strong for next year as revenue is expected to grow by 33.8% and earnings are expected to rise 53.8%. PAGS stock looks overvalued through, with a P/E of 73 and a Price to Sales of 15.4.
Its stock has shown bullish momentum over the near, mid, and long-term. This has led to a “Strong Buy” rating in our POWR Ratings system and a grade of “A” for Trade Grade and Buy & Hold Grade. This is reflected in its chart below.
Take a look at the 1-year chart of PAGS below with the added notations…
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