Analyst Mario Pierry from Bank of America Securities maintained a Hold rating on Pagseguro Digital (PAGS – Research Report) and keeping the price target at $10.00.
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Mario Pierry’s rating is based on a combination of factors affecting Pagseguro Digital’s financial performance. The company’s net income showed a modest year-over-year increase, but it was slightly below Bank of America’s expectations due to weaker-than-anticipated total payment volume (TPV) growth and higher financial expenses. While the repricing of take-rates helped offset some of the weak TPV growth, elevated financial expenses, driven by a higher average Selic rate, impacted the bottom line.
Despite these challenges, Pagseguro Digital managed to expand its gross profit and maintain its guidance, although at the lower end. The company’s strategic repricing efforts and cost control measures have been somewhat effective, but the challenging macroeconomic environment continues to constrain earnings growth and the expansion of new business verticals. As a result, Pierry maintains a Hold rating, reflecting a cautious outlook given the current market conditions and the company’s financial dynamics.
PAGS’s price has also changed moderately for the past six months – from $8.090 to $9.870, which is a 22.00% increase.