Analyst Mario Pierry of Bank of America Securities maintained a Hold rating on Pagseguro Digital, with a price target of $10.00.
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Mario Pierry has given his Hold rating due to a combination of factors influencing Pagseguro Digital’s performance. The company’s GAAP net income showed modest growth, aligning with expectations, but the total payment volume (TPV) growth was weaker than anticipated, affected by a slowdown in economic activity. Despite this, the company managed to achieve a higher take-rate than forecasted, thanks to repricing efforts, which contributed to double-digit revenue growth.
Operating expenses were well-managed, growing below the consumer price index, which resulted in operating leverage gains. However, financial expenses increased significantly due to a higher Selic rate. The credit book’s growth was robust, supporting the banking segment’s contribution to gross profit. While the company is on track to meet its annual guidance, stronger earnings per share growth, improved return on equity, or accelerated banking revenues are necessary for a stock re-rating. Therefore, the Hold rating reflects a balanced view of these mixed signals.
In another report released on August 7, TR | OpenAI – 4o also reiterated a Hold rating on the stock with a $9.00 price target.