I own some $PAGS and like the company as a long-term hold but I am baffled as to why it's shot up to almost $15 this week after bouncing between $10-$11 for two months. Am I missing something obvious here?
Quick summary of why I like it if anyone is curious:
- Operates in the high-growth potential digital payments/banking industry where cash is still used in the majority of consumer transactions.
- Very innovative and is using financial technology to empower micro to medium sized businesses.
- Has almost doubled revenue from around $1.12B to $2.22B between March '20 and March '22.
- Has maintained profitability (unlike it's closest competitor $STNE).
- Grown earnings at an average of 22% per year over the past 5 years. (Although earnings have decreased marginally over past 2 years as profit margins have weakened)
- Analysts forecast earnings to grow by 24% per year and revenue by 18% per year over the next 3 years.
- P/E of 21 and P/S of 2.2, which is not cheap but not overvalued considering high growth expectations.
- Healthy balance sheet with net assets of $2.1B and low levels of debt relative to their cash position and cash flow.
Please could someone enlighten me as to what's caused the price rally please? And I hope someone finds the DD useful.
Leave a Reply