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Strength Seen in PagSeguro Digital Ltd. (PAGS): Can Its 22.9% Jump Turn into More Strength?

PagSeguro Digital Ltd. (PAGS) shares rallied 22.9% in the last trading session to close at $15.03. This move can be attributable to notable volume with a higher number of shares being traded than in a typical session. This compares to the stock's 16.3% gain over the past four weeks.

PagSeguro Digital extended its rally for the third straight day, driven by optimism over the ongoing recovery in the electronics payments space and rising demand for digital transactions. Further, Brazil is expected to witness a steady decline in inflation, improving the economic situation, which might be beneficial for companies like PagSeguro Digital. Also, investors expect PAGS to generate massive year-over-year growth in margins and revenues when it reports June-quarter results.

This company is expected to post quarterly earnings of $0.21 per share in its upcoming report, which represents a year-over-year change of +5%. Revenues are expected to be $663.69 million, up 48.4% from the year-ago quarter.

While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.

For PagSeguro Digital Ltd., the consensus EPS estimate for the quarter has been revised 4.7% higher over the last 30 days to the current level. And a positive trend in earnings estimate revision usually translates into price appreciation. So, make sure to keep an eye on PAGS going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

PagSeguro Digital Ltd. is part of the Zacks Financial Transaction Services industry. Marqeta (MQ), another stock in the same industry, closed the last trading session 2.2% lower at $10.96. MQ has returned 29.5% in the past month.

For Marqeta, the consensus EPS estimate for the upcoming report has remained unchanged over the past month at -$0.11. This represents a change of +62.1% from what the company reported a year ago. Marqeta currently has a Zacks Rank of #3 (Hold).

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