PagSeguro Digital Ltd. (PAGS) shares plummeted 5.07% in pre-market trading on Wednesday, despite the company reporting better-than-expected first-quarter earnings. The stock's decline appears to be influenced by a combination of factors, including a target price cut by Susquehanna and slight revenue miss.
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 R$1.63 per share in the same quarter last year. However, PagSeguro's revenue of R$4.85 billion, while up 12.6% year-over-year, fell short of the R$4.88 billion analysts had anticipated.
Adding to the downward pressure on the stock, Susquehanna cut its target price for PagSeguro from $16 to $14. This reduction in price target, coupled with the slight revenue miss, seems to have overshadowed the earnings beat in investors' minds. The market reaction suggests that investors may be concerned about the company's growth trajectory or potential headwinds in the Brazilian financial services sector, despite PagSeguro's solid bottom-line performance.
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