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PagSeguro shares continue to slide as Q3 estimates missed

By Lawrence Gash

Rate of growth at Brazilian payments firm slows after disappointing earnings

Brazilian payments provider has missed its third-quarter earnings estimates sending its share price sliding.

PagSeguro stock lifted 2.59 per cent on Thursday, but this will do little to offset the more than 17 per cent drop the day before. In October the share price plunged by 19 per cent after the company announced a secondary stock offering, granted underwriters the option of buying 2.51 million additional shares and found its controlling shareholder, Universo Online, preparing to sell 16.75 million Class A common shares.

PagSeguro's results missed analysts’ estimates. Revenue growth of 30 per cent at $348.8m (£269.8m, €314.9m) fell just short, while a 25 per cent increase in earnings per share to $0.28, was 5 per cent less than expected.

The Brazilian financial technology firm provides banking services to millions of so-called “micro-merchants”, as well to small and medium-sized businesses. Products include the PagSeguro digital account, which centralises cash-in and cash-out options, functionalities and services into a single interface, and the PagSeguro Ecosystem,which operates as a closed loop allowing users to address day-to-day financial needs.

Brazil has a huge market of independent workers and sellers requiring digital banking, which boosted the company in its early years. It is now seeking to expand internationally seeking growth among the “unbanked”.

Although expansion may be slowing, PagSeguro has a market cap of $10.28bn (£7.95bn, €9.28bn), with a large number of institutional investors.

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