PagSeguro Digital Ltd PAGS witnessed an uptick in its shares on Tuesday morning.
Evercore ISI highlighted the presence of various cyclical and secular tailwinds expected to steer the company’s revenue and earnings growth from 2024 to 2026.
Analyst Sheriq Sumar’s Take on PagSeguro Digital: Sheriq Sumar upgraded PagSeguro Digital’s rating from In-Line to Outperform, setting a price target of $18.
PagSeguro Digital’s Growth Potential: Sumar projected an acceleration in the company’s total payment volume (TPV) growth, from 12% in 2023 to 17% in 2024 and 13% in 2025, according to the upgrade note.
Discover more stock ratings from various analysts.
Sumar noted that PagSeguro Digital’s TPV was likely receiving a boost through the execution of its go-to-market strategy, focusing on high-value SMB merchants by offering value-added services and banking solutions.
Furthermore, Sumar anticipated a stabilization in net take rates starting in 2025 as the attrition of low-value nano-merchants diminishes.
Sumar also predicted significant relief in margin pressure due to financial expenses, with declining interest rates in Brazil and a rise in client deposits providing a more cost-effective source of funding for the prepayment business.
Market Performance of PAGS: The share price of PagSeguro Digital had surged by 4.67% to $14.57 at the time of publication on Tuesday.
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