PagSeguro Digital Ltd. (NYSE
AGS) is a prominent player in the financial transaction services industry, providing digital payment solutions primarily in Brazil. The company competes with other financial service providers like StoneCo and MercadoLibre. On February 21, 2025, PAGS reported its earnings, showcasing a strong performance in terms of earnings per share (EPS) but falling short on revenue expectations.
PAGS reported an EPS of $0.34, surpassing the estimated $0.29, marking a 17.24% earnings surprise. This continues the company's trend of exceeding consensus EPS estimates over the past four quarters. In the previous quarter, PAGS also outperformed expectations with an EPS of $0.32 against an expected $0.30, resulting in a 6.67% surprise. This consistent performance highlights the company's ability to manage its earnings effectively.
Despite the positive EPS, PAGS generated revenue of approximately $825 million, which was below the estimated $872 million. However, for the quarter ending December 2024, the company reported $875.27 million in revenue, exceeding the Zacks Consensus Estimate by 5.76%. This indicates that while the recent revenue fell short, PAGS has a history of outperforming revenue expectations.
PagSeguro's financial metrics reveal a mixed picture. The company has a price-to-earnings (P/E) ratio of 7.38, suggesting a low valuation relative to its earnings. Its price-to-sales ratio is about 0.86, indicating that the market values its sales at less than one times its revenue. However, the enterprise value to operating cash flow ratio is negative at -25.50, which may point to challenges in generating cash flow from operations.
The company's financial health appears stable, with a debt-to-equity ratio of approximately 0.21, indicating conservative use of debt. Additionally, the current ratio of about 1.52 suggests that PAGS has a healthy level of liquidity to cover its short-term liabilities. These metrics reflect a company that, despite some challenges, maintains a solid financial foundation.
