PagSeguro Digital Ltd. (PAGS) shares plummeted 5.07% in pre-market trading on Wednesday, despite reporting better-than-expected first-quarter earnings. The significant drop comes as investors weigh the company's mixed financial results and a target price cut from a major analyst.

The Brazilian fintech company reported adjusted earnings per share of R$1.81 for the quarter ended March 31, surpassing the mean analyst expectation of R$1.76. This represents an improvement from the R$1.63 per share reported in the same quarter last year. However, PagSeguro's revenue of R$4.85 billion, while up 12.6% year-over-year, fell slightly short of the R$4.88 billion analysts had forecast.

Adding to the downward pressure on the stock, Susquehanna reduced its target price for PagSeguro from $16 to $14. This adjustment, coupled with the revenue miss, appears to have overshadowed the company's earnings beat and may have contributed to the sharp decline in share price. Despite the current setback, it's worth noting that PagSeguro's shares had risen by 27.8% this quarter and gained 55.8% year-to-date prior to this report, indicating overall positive momentum for the stock in 2025.