Mastercard (NYSE:MA – Get Free Report) and PagSeguro Digital (NYSE:PAGS – Get Free Report) are both business services companies, but which is the better stock? We will contrast the two businesses based on the strength of their dividends, profitability, risk, analyst recommendations, valuation, earnings and institutional ownership.
Analyst Ratings This is a breakdown of current ratings for Mastercard and PagSeguro Digital, as reported by MarketBeat.
Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score Mastercard 1 1 20 6 3.11 PagSeguro Digital 0 4 5 0 2.56 Mastercard currently has a consensus price target of $664.40, suggesting a potential upside of 32.60%. PagSeguro Digital has a consensus price target of $11.86, suggesting a potential upside of 11.49%. Given Mastercard’s stronger consensus rating and higher probable upside, analysts plainly believe Mastercard is more favorable than PagSeguro Digital.
Profitability This table compares Mastercard and PagSeguro Digital’s net margins, return on equity and return on assets.
Net Margins Return on Equity Return on Assets Mastercard 45.65% 203.92% 29.74% PagSeguro Digital 10.37% 16.20% 3.33% Insider and Institutional Ownership 97.3% of Mastercard shares are owned by institutional investors. Comparatively, 45.9% of PagSeguro Digital shares are owned by institutional investors. 0.1% of Mastercard shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.
Dividends Mastercard pays an annual dividend of $3.48 per share and has a dividend yield of 0.7%. PagSeguro Digital pays an annual dividend of $0.14 per share and has a dividend yield of 1.3%. Mastercard pays out 21.1% of its earnings in the form of a dividend. PagSeguro Digital pays out 10.9% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Mastercard has increased its dividend for 13 consecutive years. PagSeguro Digital is clearly the better dividend stock, given its higher yield and lower payout ratio.
Volatility and Risk Mastercard has a beta of 0.83, indicating that its share price is 17% less volatile than the S&P 500. Comparatively, PagSeguro Digital has a beta of 1.42, indicating that its share price is 42% more volatile than the S&P 500.
Valuation & Earnings This table compares Mastercard and PagSeguro Digital”s top-line revenue, earnings per share (EPS) and valuation.
Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio Mastercard $32.79 billion 13.63 $14.97 billion $16.52 30.33 PagSeguro Digital $3.65 billion 0.96 $379.40 million $1.28 8.31 Mastercard has higher revenue and earnings than PagSeguro Digital. PagSeguro Digital is trading at a lower price-to-earnings ratio than Mastercard, indicating that it is currently the more affordable of the two stocks.
Summary Mastercard beats PagSeguro Digital on 15 of the 18 factors compared between the two stocks.
About Mastercard (Get Free Report)
Mastercard Incorporated, a technology company, provides transaction processing and other payment-related products and services in the United States and internationally. The company offers integrated products and value-added services for account holders, merchants, financial institutions, digital partners, businesses, governments, and other organizations, such as programs that enable issuers to provide consumers with credits to defer payments; payment products and solutions that allow its customers to access funds in deposit and other accounts; prepaid programs services; and commercial credit, debit, and prepaid payment products and solutions. It also provides solutions that enable businesses or governments to make payments to businesses, including Virtual Card Number, which is generated dynamically from a physical card and leverages the credit limit of the funding account; a platform to optimize supplier payment enablement campaigns for financial institutions; and treasury intelligence platform that offers corporations with recommendations to enhance working capital performance and accelerate spend on cards. In addition, the company offers Mastercard Send, which partners with digital messaging and payment platforms to enable consumers to send money directly within applications to other consumers; and Mastercard Cross-Border Services enables a range of payment flows through a distribution network with a single point of access to send and receive money globally through various channels, including bank accounts, mobile wallets, cards, and cash payouts. Further, it provides cyber and intelligence solutions; insights and analytics, consulting, marketing, loyalty, processing, and payment gateway solutions for e-commerce merchants; and open banking and digital identity services. The company offers payment solutions and services under the MasterCard, Maestro, and Cirrus name. Mastercard Incorporated was founded in 1966 and is headquartered in Purchase, New York.
About PagSeguro Digital (Get Free Report)
PagSeguro Digital Ltd., together with its subsidiaries, provides financial technology solutions and services for consumers, individual entrepreneurs, micro-merchants, and small and medium-sized companies in Brazil and internationally. The company's products and services include PagSeguro Ecosystem, a digital ecosystem that operates as a closed loop where its clients are able to address their primary day to day financial needs, including receiving and spending funds, and managing and growing their businesses; PagBank digital account, which offers payment and banking services through the PagBank mobile app, as well as centralizes various cash-in options, functionalities, services, and cash-out options in a single ecosystem; and PlugPag, a tool for medium-sized and larger merchants that enables them to connect their point of sale (POS) device directly to their enterprise resource planning software or sales automation system through Bluetooth. It also offers cash-in solutions; online and in-person payment tools; and online gaming and cross-border digital services, as well as issues prepaid, credit, and cash cards. In addition, the company provides functionalities, and value-added services and features, such as purchase protection mechanisms, antifraud platform, account and business management tools, POS app, i-Banking App, Super App, and e-commerce support and bill payment services; and PedeFácil, an order management and food delivery app. Further, it is involved in processing of back-office solutions, including sales reconciliation, and gateway solutions and services, as well as the capture of credit cards with acquirers and sub acquirers. The company was founded in 2006 and is headquartered in São Paulo, Brazil.
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Key Takeaways Five low P/B stocks-PAGS, MG, STRA, NWG and PCG-pass key value screens for AprilScreening uses low P/B, P/S, P/E, PEG1, price greater than or equal to $5 and solid trading volume thresholdsPagSeguro Digital, Mistras Group and peers show ~15% long-term EPS growth projections Value investors typically rely on price-to-earnings (P/E) and price-to-sales (P/S) ratios to spot undervalued stocks with strong return potential. However, the often-overlooked price-to-book (P/B) ratio is also a simple and effective valuation metric. It compares a company’s market price with its book value.
The P/B ratio is calculated as:
P/B ratio = market price per share ÷ book value of equity per share
This ratio indicates how much investors are willing to pay relative to a company’s book value. For instance, if a stock trades at $10 and its book value per share is $5, investors are paying twice its book value. Generally, a P/B ratio below 1.0 suggests potential undervaluation, though many value investors consider stocks with a P/B below 3.0 as attractive.
This metric can help identify attractively priced stocks with upside potential like PagSeguro Digital (PAGS - Free Report) , Mistras Group (MG - Free Report) , Strategic Education (STRA - Free Report) , NatWest Group plc (NWG - Free Report) and PG&E Corporation (PCG - Free Report) .
What is Book Value?There are several ways in which book value can be defined. Book value is the total value that would be left over, according to the company’s balance sheet, if it went bankrupt immediately. In other words, this is what shareholders would theoretically receive if a company liquidates all its assets after paying off all its liabilities.
It is calculated by subtracting total liabilities from the total assets of a company. In most cases, this equates to common stockholders’ equity on the balance sheet. However, depending on the company’s balance sheet, intangible assets should also be subtracted from total assets to determine book value.
Understanding P/B RatioBy comparing the book value of equity to its market price, we get an idea of whether a company is under- or overpriced. Like P/E or P/S ratios, it is always better to compare the P/B ratio within industries.
A P/B ratio of less than one means that the stock is trading at less than its book value or the stock is undervalued and, therefore, a good buy. Conversely, a stock with a ratio greater than one can be interpreted as being overvalued or relatively expensive.
For example, a stock with a P/B ratio of 2 means that we pay $2 for every $1 of book value. Thus, the higher the P/B, the more expensive the stock.
But there is a warning. A P/B ratio of less than one can also mean that the company is earning weak or even negative returns on its assets or that the assets are overstated. In such a case, the stock should be shunned because it may be destroying shareholder value. Conversely, the stock’s price may be significantly high — thereby pushing the P/B ratio to more than one — in the likely case that it has become a takeover target, a good enough reason to own the stock.
Moreover, the P/B ratio is not without limitations. It is useful for businesses like finance, investments, insurance and banking or manufacturing companies with many liquid/tangible assets on the books. However, it can be misleading for firms with significant R&D expenditure, high debt, service companies, or those with negative earnings.
In any case, the ratio is not particularly relevant as a standalone number. One should analyze other ratios like P/E, P/S and debt to equity before arriving at a reasonable investment decision.
Screening ParametersPrice to Book (common Equity) less than X-Industry Median: A lower P/B compared with the industry average implies that there is enough room for the stock to gain.
Price to Sales less than X-Industry Median: The P/S ratio determines how much the market values every dollar of the company’s sales/revenues — a lower ratio than the industry makes the stock attractive.
Price to Earnings using F(1) estimate less than X-Industry Median: The P/E ratio (F1) values a company based on its current share price relative to its estimated earnings per share — a lower ratio than the industry is considered better.
PEG less than 1: PEG links the P/E ratio to the future growth rate of the company. The PEG ratio portrays a more complete picture than the P/E ratio. A value of less than 1 indicates that the stock is undervalued, and investors need to pay less for a stock that has bright earnings growth prospects.
Current Price greater than or equal to $5: They must all be trading at a minimum of $5 or higher.
Average 20-Day Volume greater than or equal to 100,000: A substantial trading volume ensures that the stock is easily tradable.
Zacks Rank less than or equal to #2: Zacks Rank #1 (Strong Buy) or 2 (Buy) stocks are known to outperform irrespective of the market environment.
Value Score equal to A or B: Our research shows that stocks with a Value Score of A or B, when combined with a Zacks Rank #1 or 2, offer the best opportunities in the value investing space.
5 Low Price-to-Book StocksHere are five of the 15 stocks that qualified for the screening:
São Paulo, Brazil-based PagSeguro Digital is one of the largest digital banks in Brazil, promoting innovative solutions in financial services and payment methods.
PAGS currently has a Value Score of A and a Zacks Rank #2. PAGS has a projected 3-5-year EPS growth rate of 14.9%. You can see the complete list of today’s Zacks #1 Rank stocks here.
NJ-based Mistras Group is a global provider of technology-enabled, non-destructive testing solutions used to evaluate the structural integrity of critical energy, industrial and public infrastructure. Mistras Group currently has a Zacks Rank #1 and a Value Score of B. MG has a projected 3-5-year EPS growth rate of 16.0%.
Herndon, VA-based Strategic Education, through its subsidiaries Strayer University and New York Code and Design Academy (NYCDA), provides a range of post-secondary education and other academic programs in the United States. NYCDA is a New York City-based provider of web and application software development courses. Strategic Education has a projected 3-5-year EPS growth rate of 15%.
STRA currently has a Zacks Rank #1 and a Value Score of B.
NatWest Group provides personal and commercial banking and other financial solutions. NatWest Group, formerly known as The Royal Bank of Scotland Group plc, is based in Edinburgh, the United Kingdom. NatWest Group has a Zacks Rank #2 and a Value Score of B. PAX has a projected 3-5-year EPS growth rate of 15.3%.
San Francisco, CA-based PG&E Corporation is the parent holding company of California’s largest regulated electric and gas utility, Pacific Gas and Electric Company. The utility generates revenues mainly through the sale and delivery of electricity and natural gas to customers. It engages in the business of electricity and natural gas distribution; electricity generation, procurement, and transmission; and natural gas procurement, transportation and storage. The utility also operates hydro-electric, nuclear and fossil fuel power plants. This Zacks Rank #2 company has a Value Score of A. PCG has a projected 3-5-year EPS growth rate of 15.9%.
From a technical perspective, PagSeguro Digital Ltd. (PAGS - Free Report) is looking like an interesting pick, as it just reached a key level of support. PAGS recently overtook the 50-day moving average, and this suggests a short-term bullish trend.
One of the three major moving averages, the 50-day simple moving average is commonly used by traders and analysts to determine support or resistance levels for different types of securities. However, the 50-day is considered to be more important since it's the first marker of an up or down trend.
PAGS has rallied 6.5% over the past four weeks, and the company is a Zacks Rank #2 (Buy) at the moment. This combination suggests PAGS could be on the verge of another move higher.
Looking at PAGS's earnings estimate revisions, investors will be even more convinced of the bullish uptrend. There have been 1 higher compared to none lower for the current fiscal year, and the consensus estimate has moved up as well.
Investors should think about putting PAGS on their watchlist given the ultra-important technical indicator and positive move in earnings estimate revisions.
PagSeguro Digital Ltd. (PAGS - Free Report) closed the most recent trading day at $10.65, moving -1.02% from the previous trading session. The stock's performance was behind the S&P 500's daily gain of 0.62%. At the same time, the Dow added 0.58%, and the tech-heavy Nasdaq gained 0.83%.
Shares of the company have appreciated by 6.11% over the course of the past month, outperforming the Business Services sector's loss of 4.48%, and the S&P 500's gain of 0.8%.
Investors will be eagerly watching for the performance of PagSeguro Digital Ltd. in its upcoming earnings disclosure. The company is expected to report EPS of $0.39, up 25.81% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $984.75 million, up 19.06% from the prior-year quarter.
Looking at the full year, the Zacks Consensus Estimates suggest analysts are expecting earnings of $1.67 per share and revenue of $4.04 billion. These totals would mark changes of +17.61% and +10.36%, respectively, from last year.
Any recent changes to analyst estimates for PagSeguro Digital Ltd. should also be noted by investors. Recent revisions tend to reflect the latest near-term business trends. Consequently, upward revisions in estimates express analysts' positivity towards the business operations and its ability to generate profits.
Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To exploit this, we've formed the Zacks Rank, a quantitative model that includes these estimate changes and presents a viable rating system.
The Zacks Rank system, running from #1 (Strong Buy) to #5 (Strong Sell), holds an admirable track record of superior performance, independently audited, with #1 stocks contributing an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 0.91% higher. Currently, PagSeguro Digital Ltd. is carrying a Zacks Rank of #2 (Buy).
In terms of valuation, PagSeguro Digital Ltd. is presently being traded at a Forward P/E ratio of 6.45. For comparison, its industry has an average Forward P/E of 11.58, which means PagSeguro Digital Ltd. is trading at a discount to the group.
We can also see that PAGS currently has a PEG ratio of 0.43. The PEG ratio bears resemblance to the frequently used P/E ratio, but this parameter also includes the company's expected earnings growth trajectory. As of the close of trade yesterday, the Financial Transaction Services industry held an average PEG ratio of 0.89.
The Financial Transaction Services industry is part of the Business Services sector. This group has a Zacks Industry Rank of 169, putting it in the bottom 31% of all 250+ industries.
The Zacks Industry Rank is ordered from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Make sure to utilize Zacks.com to follow all of these stock-moving metrics, and more, in the coming trading sessions.
Investors interested in Business Services stocks should always be looking to find the best-performing companies in the group. Has PagSeguro Digital Ltd. (PAGS - Free Report) been one of those stocks this year? A quick glance at the company's year-to-date performance in comparison to the rest of the Business Services sector should help us answer this question.
PagSeguro Digital Ltd. is a member of our Business Services group, which includes 234 different companies and currently sits at #13 in the Zacks Sector Rank. The Zacks Sector Rank considers 16 different groups, measuring the average Zacks Rank of the individual stocks within the sector to gauge the strength of each group.
The Zacks Rank is a proven model that highlights a variety of stocks with the right characteristics to outperform the market over the next one to three months. The system emphasizes earnings estimate revisions and favors companies with improving earnings outlooks. PagSeguro Digital Ltd. is currently sporting a Zacks Rank of #2 (Buy).
The Zacks Consensus Estimate for PAGS' full-year earnings has moved 2.9% higher within the past quarter. This shows that analyst sentiment has improved and the company's earnings outlook is stronger.
Based on the latest available data, PAGS has gained about 10.5% so far this year. Meanwhile, stocks in the Business Services group have lost about 11.4% on average. This means that PagSeguro Digital Ltd. is performing better than its sector in terms of year-to-date returns.
UL Solutions Inc. (ULS - Free Report) is another Business Services stock that has outperformed the sector so far this year. Since the beginning of the year, the stock has returned 7.1%.
The consensus estimate for UL Solutions Inc.'s current year EPS has increased 6.1% over the past three months. The stock currently has a Zacks Rank #2 (Buy).
Breaking things down more, PagSeguro Digital Ltd. is a member of the Financial Transaction Services industry, which includes 36 individual companies and currently sits at #159 in the Zacks Industry Rank. On average, stocks in this group have lost 17.9% this year, meaning that PAGS is performing better in terms of year-to-date returns.
UL Solutions Inc., however, belongs to the Business - Services industry. Currently, this 20-stock industry is ranked #149. The industry has moved -12.4% so far this year.
Going forward, investors interested in Business Services stocks should continue to pay close attention to PagSeguro Digital Ltd. and UL Solutions Inc. as they could maintain their solid performance.
On April 15, 2026, PagSeguro Digital Ltd PAGS shares rose 4.0% to a current price of $11.34. The stock has shown remarkable performance, trading within a 52-week range of $7.74 to $12.32, which highlights its volatility and potential for growth over the past year.
GF Value™ verdict: Current price of $11.34 is 23.4% below the estimated fair value of $14.80.GF Score™: 76/100, indicating an above-average potential for long-term returns.Most notable signal: Insider activity shows that insiders bought $5.0M worth of shares in the last 3 months, with no selling activity reported. Is PAGS Overvalued or Undervalued? The current price of PagSeguro Digital Ltd PAGS at $11.34 is significantly below the GF Value™ estimate of $14.80, suggesting that the stock is undervalued by approximately 23.4%. This presents an opportunity for investors who recognize the potential upside. The GF Valuation label categorizes PAGS as 'Modestly Undervalued,' indicating that while there are positive signals, caution is still advised as market conditions can change rapidly.
GF Value™ is GuruFocus' proprietary measure of intrinsic value, calculated from historical trading multiples, past business growth, and future performance estimates. The margin of safety provided by the undervaluation could offer a cushion against market volatility, but investors should consider the broader economic factors that could impact future performance.
How Does PAGS's Valuation Compare to Its History? Metric Current Historical P/E (TTM) 8.8x 10.8x (5-Year Median) Forward P/E 6.6x N/A The current P/E ratio of 8.8x is below the historical 5-year median P/E of 10.8x, indicating that the stock is trading at a lower valuation compared to its historical performance. This P/E analysis supports the GF Value™ verdict of undervaluation, suggesting that PAGS may present an attractive entry point for value-focused investors.
What Does PAGS's GF Score™ Tell Us? Metric Rating GF Score™ 76 Financial Strength 2/10 Profitability 6/10 Growth 6/10 Valuation 8/10 Momentum 8/10 The GF Score™ of 76/100 indicates a solid overall ranking, suggesting that PAGS has favorable long-term potential. The strongest areas are its Valuation and Momentum ranks, both rated at 8/10, reflecting favorable price dynamics and relative value. However, the Financial Strength score of 2/10 is a point of concern, indicating potential vulnerabilities in the company's balance sheet or liquidity position.
What Are Insiders Doing with PAGS Stock? Recent insider activity indicates strong confidence in PagSeguro Digital Ltd, as insiders have purchased $5.0M worth of shares over the last three months without any selling activity. This trend often signals that those with the most insight into the company's operations believe the stock is undervalued and poised for growth, which could further bolster investor sentiment.
The absence of selling activity suggests that insiders are optimistic about the company's future performance and share price appreciation, reinforcing the idea that PAGS may be well-positioned in the current market environment.
What This Means for Investors Based on the current analysis, PagSeguro Digital Ltd PAGS is considered undervalued according to the GF Value™ assessment. The significant difference between the current price and the estimated fair value, combined with positive insider activity, indicates that there may be potential for future appreciation in stock value. However, investors should remain cautious and consider the company's financial strength and broader market conditions.
For the complete analysis, visit the PagSeguro Digital Ltd PAGS stock page. You can also explore the GF Value™ page for detailed valuation methodology, or use the GuruFocus Stock Screener to find similar opportunities.
Frequently Asked Questions What is PAGS's GF Score™?
PAGS has a GF Score™ of 76/100, indicating it has above-average potential for long-term returns based on GuruFocus' comprehensive scoring system.
Is PAGS overvalued or undervalued?
PAGS is currently undervalued, with a GF Value™ estimate indicating a 23.4% upside potential based on its intrinsic value assessment.
What is PAGS's P/E ratio?
PAGS has a P/E TTM of 8.8x, which is below its 5-year median P/E of 10.8x, supporting the view that the stock is undervalued relative to its historical performance.
This stock alert was generated using automated technology and GuruFocus financial data to provide readers with timely and accurate market reporting. This content was reviewed by GuruFocus editorial team prior to publication. Please send any questions or comments about this story to [email protected].
In the latest close session, PagSeguro Digital Ltd. (PAGS - Free Report) was up +2.12% at $11.58. This move outpaced the S&P 500's daily gain of 0.26%. At the same time, the Dow added 0.24%, and the tech-heavy Nasdaq gained 0.36%.
The company's stock has climbed by 17.76% in the past month, exceeding the Business Services sector's gain of 1.65% and the S&P 500's gain of 5.98%.
Investors will be eagerly watching for the performance of PagSeguro Digital Ltd. in its upcoming earnings disclosure. The company's upcoming EPS is projected at $0.4, signifying a 29.03% increase compared to the same quarter of the previous year. Our most recent consensus estimate is calling for quarterly revenue of $1.01 billion, up 22.01% from the year-ago period.
For the annual period, the Zacks Consensus Estimates anticipate earnings of $1.66 per share and a revenue of $4.12 billion, signifying shifts of +16.9% and +12.65%, respectively, from the last year.
Investors should also take note of any recent adjustments to analyst estimates for PagSeguro Digital Ltd. These revisions typically reflect the latest short-term business trends, which can change frequently. As a result, we can interpret positive estimate revisions as a good sign for the business outlook.
Based on our research, we believe these estimate revisions are directly related to near-term stock moves. To utilize this, we have created the Zacks Rank, a proprietary model that integrates these estimate changes and provides a functional rating system.
The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.61% higher. PagSeguro Digital Ltd. currently has a Zacks Rank of #3 (Hold).
Looking at its valuation, PagSeguro Digital Ltd. is holding a Forward P/E ratio of 6.82. Its industry sports an average Forward P/E of 11.15, so one might conclude that PagSeguro Digital Ltd. is trading at a discount comparatively.
It is also worth noting that PAGS currently has a PEG ratio of 0.46. The PEG ratio is akin to the commonly utilized P/E ratio, but this measure also incorporates the company's anticipated earnings growth rate. As the market closed yesterday, the Financial Transaction Services industry was having an average PEG ratio of 0.93.
The Financial Transaction Services industry is part of the Business Services sector. This group has a Zacks Industry Rank of 147, putting it in the bottom 40% of all 250+ industries.
The strength of our individual industry groups is measured by the Zacks Industry Rank, which is calculated based on the average Zacks Rank of the individual stocks within these groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.
PagSeguro Digital Ltd. (PAGS - Free Report) ended the recent trading session at $10.76, demonstrating a -2.98% change from the preceding day's closing price. This move lagged the S&P 500's daily gain of 1.05%. At the same time, the Dow added 0.69%, and the tech-heavy Nasdaq gained 1.64%.
The stock of company has risen by 11.35% in the past month, leading the Business Services sector's gain of 3.68% and the S&P 500's gain of 8.59%.
The investment community will be closely monitoring the performance of PagSeguro Digital Ltd. in its forthcoming earnings report. On that day, PagSeguro Digital Ltd. is projected to report earnings of $0.4 per share, which would represent year-over-year growth of 29.03%. In the meantime, our current consensus estimate forecasts the revenue to be $1.01 billion, indicating a 22.01% growth compared to the corresponding quarter of the prior year.
For the full year, the Zacks Consensus Estimates are projecting earnings of $1.66 per share and revenue of $4.12 billion, which would represent changes of +16.9% and +12.65%, respectively, from the prior year.
It is also important to note the recent changes to analyst estimates for PagSeguro Digital Ltd. These revisions help to show the ever-changing nature of near-term business trends. Therefore, positive revisions in estimates convey analysts' confidence in the business performance and profit potential.
Our research shows that these estimate changes are directly correlated with near-term stock prices. To utilize this, we have created the Zacks Rank, a proprietary model that integrates these estimate changes and provides a functional rating system.
The Zacks Rank system, ranging from #1 (Strong Buy) to #5 (Strong Sell), possesses a remarkable history of outdoing, externally audited, with #1 stocks returning an average annual gain of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has shifted 0.61% upward. Right now, PagSeguro Digital Ltd. possesses a Zacks Rank of #3 (Hold).
From a valuation perspective, PagSeguro Digital Ltd. is currently exchanging hands at a Forward P/E ratio of 6.67. This represents a discount compared to its industry average Forward P/E of 12.08.
Also, we should mention that PAGS has a PEG ratio of 0.45. The PEG ratio bears resemblance to the frequently used P/E ratio, but this parameter also includes the company's expected earnings growth trajectory. The average PEG ratio for the Financial Transaction Services industry stood at 0.95 at the close of the market yesterday.
The Financial Transaction Services industry is part of the Business Services sector. This group has a Zacks Industry Rank of 145, putting it in the bottom 41% of all 250+ industries.
The Zacks Industry Rank assesses the vigor of our specific industry groups by computing the average Zacks Rank of the individual stocks incorporated in the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Keep in mind to rely on Zacks.com to watch all these stock-impacting metrics, and more, in the succeeding trading sessions.
PagSeguro Digital Ltd. (PAGS - Free Report) closed at $10.11 in the latest trading session, marking a -1.37% move from the prior day. The stock's performance was behind the S&P 500's daily loss of 0.49%. Elsewhere, the Dow saw a downswing of 0.05%, while the tech-heavy Nasdaq depreciated by 0.9%.
The stock of company has risen by 5.56% in the past month, leading the Business Services sector's gain of 5.05% and undershooting the S&P 500's gain of 12.8%.
Investors will be eagerly watching for the performance of PagSeguro Digital Ltd. in its upcoming earnings disclosure. In that report, analysts expect PagSeguro Digital Ltd. to post earnings of $0.4 per share. This would mark year-over-year growth of 29.03%. Meanwhile, the latest consensus estimate predicts the revenue to be $1.01 billion, indicating a 22.01% increase compared to the same quarter of the previous year.
In terms of the entire fiscal year, the Zacks Consensus Estimates predict earnings of $1.66 per share and a revenue of $4.12 billion, indicating changes of +16.9% and +12.65%, respectively, from the former year.
Investors should also take note of any recent adjustments to analyst estimates for PagSeguro Digital Ltd. Such recent modifications usually signify the changing landscape of near-term business trends. As such, positive estimate revisions reflect analyst optimism about the business and profitability.
Our research reveals that these estimate alterations are directly linked with the stock price performance in the near future. To take advantage of this, we've established the Zacks Rank, an exclusive model that considers these estimated changes and delivers an operational rating system.
The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has moved 0.3% lower. Currently, PagSeguro Digital Ltd. is carrying a Zacks Rank of #3 (Hold).
From a valuation perspective, PagSeguro Digital Ltd. is currently exchanging hands at a Forward P/E ratio of 6.17. This represents a discount compared to its industry average Forward P/E of 12.01.
We can additionally observe that PAGS currently boasts a PEG ratio of 0.41. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. By the end of yesterday's trading, the Financial Transaction Services industry had an average PEG ratio of 0.86.
The Financial Transaction Services industry is part of the Business Services sector. This group has a Zacks Industry Rank of 90, putting it in the top 37% of all 250+ industries.
The Zacks Industry Rank assesses the vigor of our specific industry groups by computing the average Zacks Rank of the individual stocks incorporated in the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
You can find more information on all of these metrics, and much more, on Zacks.com.
, /PRNewswire/ -- PagSeguro Digital Ltd. (NYSE: PAGS) ("PagSeguro") announces that it filed with the U.S. Securities and Exchange Commission (the "SEC") its Annual Report on Form 20-F for the fiscal year ended December 31, 2025.
The report is available on the SEC's website, at www.sec.gov, and on PagSeguro's Investor Relations website, at https://investors.pagbank.com/.
Shareholders can obtain copies of PagSeguro's Annual Report on Form 20-F (including its audited financial statements), free of charge, by making a request within a reasonable period of time to PagSeguro's Investor Relations Department.
About PagSeguro:
PagSeguro Digital Ltd. is a disruptive provider of financial technology solutions focused primarily on consumers, individual entrepreneurs, micro-merchants, small companies, and medium-sized companies in Brazil. Among its peers, PagSeguro is the only financial technology provider in Brazil whose business model covers all the following seven pillars:
Complete digital platform offering payments, financial services, and softwares fully integrated; Acquirer with the most widely accepted network in Brazil, offering face-to-face, online and cross-border payments; Issuer of debit, credit, and prepaid cards; Complete multiple bank for individuals and companies with one or more account holders; Investment platform offering public and private securities, investment funds, and a platform for trading stocks, REITs and others; Insurance distribution for PIX, cards, health, home, and life; and Super app with a comprehensive list of partners in telecommunications, transportation, delivery, games, and entertainment. PagSeguro is an UOL Group Company that provides an easy, safe, and hassle-free way of owning a free digital account, which is similar to a regular checking account linked to the Brazilian Central Bank's platform, with the feature of accepting payments, where its clients can transact and manage their cash, without the need to open a regular bank account. PagSeguro's. end-to-end digital banking ecosystem enables its customers to accept a wide range of online and in-person payment methods, including credit cards, debit cards, meal voucher cards, boletos, bank transfers, bank debits and cash deposits.
PagSeguro mission, under PagBank brand, is to disrupt and democratize financial services in Brazil, a concentrated, underpenetrated, and high interest rate market, by providing an end-to-end digital banking ecosystem that is safe, affordable, simple and mobile-first for both merchants and consumers.
Investor Relations:
PagSeguro Digital Ltd
[email protected]
investors.pagbank.com
Wall Street expects a year-over-year increase in earnings on higher revenues when PagSeguro Digital Ltd. (PAGS - Free Report) reports results for the quarter ended March 2026. While this widely-known consensus outlook is important in gauging the company's earnings picture, a powerful factor that could impact its near-term stock price is how the actual results compare to these estimates.
The earnings report might help the stock move higher if these key numbers are better than expectations. On the other hand, if they miss, the stock may move lower.
While management's discussion of business conditions on the earnings call will mostly determine the sustainability of the immediate price change and future earnings expectations, it's worth having a handicapping insight into the odds of a positive EPS surprise.
Zacks Consensus EstimateThis company is expected to post quarterly earnings of $0.40 per share in its upcoming report, which represents a year-over-year change of +29%.
Revenues are expected to be $1.01 billion, up 22% from the year-ago quarter.
Estimate Revisions TrendThe consensus EPS estimate for the quarter has remained unchanged over the last 30 days. This is essentially a reflection of how the covering analysts have collectively reassessed their initial estimates over this period.
Investors should keep in mind that the direction of estimate revisions by each of the covering analysts may not always get reflected in the aggregate change.
Price, Consensus and EPS Surprise
Earnings WhisperEstimate revisions ahead of a company's earnings release offer clues to the business conditions for the period whose results are coming out. This insight is at the core of our proprietary surprise prediction model -- the Zacks Earnings ESP (Expected Surprise Prediction).
The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter; the Most Accurate Estimate is a more recent version of the Zacks Consensus EPS estimate. The idea here is that analysts revising their estimates right before an earnings release have the latest information, which could potentially be more accurate than what they and others contributing to the consensus had predicted earlier.
Thus, a positive or negative Earnings ESP reading theoretically indicates the likely deviation of the actual earnings from the consensus estimate. However, the model's predictive power is significant for positive ESP readings only.
A positive Earnings ESP is a strong predictor of an earnings beat, particularly when combined with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold). Our research shows that stocks with this combination produce a positive surprise nearly 70% of the time, and a solid Zacks Rank actually increases the predictive power of Earnings ESP.
Please note that a negative Earnings ESP reading is not indicative of an earnings miss. Our research shows that it is difficult to predict an earnings beat with any degree of confidence for stocks with negative Earnings ESP readings and/or Zacks Rank of 4 (Sell) or 5 (Strong Sell).
How Have the Numbers Shaped Up for PagSeguro Digital?For PagSeguro Digital, the Most Accurate Estimate is lower than the Zacks Consensus Estimate, suggesting that analysts have recently become bearish on the company's earnings prospects. This has resulted in an Earnings ESP of -4.40%.
On the other hand, the stock currently carries a Zacks Rank of #3.
So, this combination makes it difficult to conclusively predict that PagSeguro Digital will beat the consensus EPS estimate.
Does Earnings Surprise History Hold Any Clue?While calculating estimates for a company's future earnings, analysts often consider to what extent it has been able to match past consensus estimates. So, it's worth taking a look at the surprise history for gauging its influence on the upcoming number.
For the last reported quarter, it was expected that PagSeguro Digital would post earnings of $0.42 per share when it actually produced earnings of $0.43, delivering a surprise of +2.38%.
Over the last four quarters, the company has beaten consensus EPS estimates four times.
Bottom LineAn earnings beat or miss may not be the sole basis for a stock moving higher or lower. Many stocks end up losing ground despite an earnings beat due to other factors that disappoint investors. Similarly, unforeseen catalysts help a number of stocks gain despite an earnings miss.
That said, betting on stocks that are expected to beat earnings expectations does increase the odds of success. This is why it's worth checking a company's Earnings ESP and Zacks Rank ahead of its quarterly release. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported.
PagSeguro Digital doesn't appear a compelling earnings-beat candidate. However, investors should pay attention to other factors too for betting on this stock or staying away from it ahead of its earnings release.
Expected Results of an Industry PlayerAmong the stocks in the Zacks Financial Transaction Services industry, Fidelity National Information Services (FIS - Free Report) , is soon expected to post earnings of $1.28 per share for the quarter ended March 2026. This estimate indicates a year-over-year change of +5.8%. This quarter's revenue is expected to be $3.27 billion, up 29.3% from the year-ago quarter.
Over the last 30 days, the consensus EPS estimate for Fidelity National has been revised 1% down to the current level. Nevertheless, the company now has an Earnings ESP of +0.17%, reflecting a higher Most Accurate Estimate.
This Earnings ESP, combined with its Zacks Rank #3 (Hold), suggests that Fidelity National will most likely beat the consensus EPS estimate. Over the last four quarters, the company surpassed consensus EPS estimates two times.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.
Digital banking platform surpasses R$ 42 billion in deposits and R$ 5 billion in loan portfolio, supported by the expansion of its banking platform and operating leverage during the period
, /PRNewswire/ -- PagBank (NYSE: PAGS), one of Brazil's largest digital banking platforms and a specialist in serving Brazilian entrepreneurs, announces its results for the first quarter of 2026 (1Q26).
During the quarter, recurring net income totaled R$ 575 million, up 4% year over year.
(Credit: PagBank) "We started the year with consistent results, even amid a more challenging macroeconomic environment, reinforcing the strength of our strategy and execution discipline. The period was marked by revenue expansion, the continued advancement of our banking platform, as well as efficiency gains and operating leverage," says Gustavo Sechin, CFO of PagBank.
Net revenue reached R$ 3.3 billion in the quarter, representing 6% growth compared to the same period last year, mainly driven by accelerated growth in the banking platform.
The highlight remained the strong growth in banking revenue, which expanded by 41% year over year. As a result, ROAE increased to 15.8%, up 80 basis points from the previous year, reinforcing the Company's improving profitability profile.
Deposits totaled R$42 billion, an increase of 23% year over year, reflecting customer confidence and the strength of the Company's capital structure, which is also supported by AAA ratings from the three largest global credit rating agencies. The loan portfolio reached R$ 5 billion, expanding 36% year over year, with highlights including working capital loans, which grew 191% year over year, as well as credit cards and payroll loans.
PagBank ended the quarter with 34 million customers, up 6% year over year, and a base of 6.3 million merchants and entrepreneurs. As a result, cash-in volume — which includes inflows into our PagBank accounts— totaled R$ 81 billion during the period, an increase of 11% year over year.
"We are a fully integrated banking platform specializing in Brazilian entrepreneurs. We continue to invest in products and services that help our customers thrive through their businesses. Our growth journey will continue to be driven by the simplicity, solidity, and innovation of one of the country's largest financial institutions," says Carlos Maud, CEO of PagBank.
Focused on small- and medium-sized entrepreneurs, PagBank continues to offer a comprehensive, unique platform that integrates payments, banking services, and credit solutions. Aligned with its purpose of simplifying the financial lives of people and businesses, the Company operates through an integrated digital ecosystem that supports financial management with greater efficiency, security, digitalization, and access to financial solutions.
To access PagBank's 1Q26 financial statements, click here.
Forward Looking Statements
This release contains forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934. All statements other than statements of historical fact, including, without limitation, those regarding the Company's expectations, intentions, beliefs, or strategies, are forward-looking statements. Words such as "expects," "anticipates," "intends," "plans," "believes," "estimates," "should," "may," "will," and variations of such words and similar expressions are intended to identify such forward-looking statements. These statements reflect the current views of the company's management and are subject to various risks and uncertainties. They are based on numerous assumptions and factors, including economic and market conditions, industry conditions, and operational factors. Any change in these assumptions or factors may cause actual results to differ materially from the company's current expectations.
About PagBank
PagBank promotes innovative solutions in financial services and payment methods, automating the process of buying, selling, and transferring to promote the business of any person or company simply and securely. PagBank, a company of the UOL Group - Brazil's leading internet company - acts as an issuer and acquirer, offering digital accounts and complete solutions for online and in-person payments (via mobile and POS devices). PagBank also offers a wide variety of payment methods, including credit and prepaid cards, bank transfers, boleto payments, and account balances, among others. The institution's solidity is recognized with top-rated certifications (AAA / triple A) awarded by three leading global evaluators, attesting to one of the highest levels of reliability in the market — a differentiating factor that reinforces its security, robust governance, and consistent ability to meet financial obligations. PagBank (PagSeguro Internet Instituição de Pagamento S.A.) is regulated by the Central Bank of Brazil as a payment institution, issuer of electronic money, issuer of post-paid instruments, and acquirer, with partnerships with the leading card brands. Its parent company, PagSeguro Digital Ltd., is publicly traded on the New York Stock Exchange (NYSE: PAGS) and is regulated by the Securities and Exchange Commission (SEC). The distribution of mutual funds is carried out by BancoSeguro S.A., which is authorized by the Central Bank of Brazil and the Securities and Exchange Commission, and is affiliated with ANBIMA.
PagSeguro Digital Ltd. (PAGS - Free Report) came out with quarterly earnings of $0.39 per share, missing the Zacks Consensus Estimate of $0.4 per share. This compares to earnings of $0.31 per share a year ago. These figures are adjusted for non-recurring items.
This quarterly report represents an earnings surprise of -1.89%. A quarter ago, it was expected that this company would post earnings of $0.42 per share when it actually produced earnings of $0.43, delivering a surprise of +2.38%.
Over the last four quarters, the company has surpassed consensus EPS estimates three times.
PagSeguro Digital, which belongs to the Zacks Financial Transaction Services industry, posted revenues of $950.5 million for the quarter ended March 2026, missing the Zacks Consensus Estimate by 5.81%. This compares to year-ago revenues of $827.14 million. The company has not been able to beat consensus revenue estimates over the last four quarters.
The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call.
PagSeguro Digital shares have added about 1.5% since the beginning of the year versus the S&P 500's gain of 8.1%.
What's Next for PagSeguro Digital?While PagSeguro Digital has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock?
There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately.
Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions.
Ahead of this earnings release, the estimate revisions trend for PagSeguro Digital was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $0.38 on $1 billion in revenues for the coming quarter and $1.66 on $4.12 billion in revenues for the current fiscal year.
Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Financial Transaction Services is currently in the top 32% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.
Another stock from the same industry, AtlasClear Holdings, Inc. (ATCH - Free Report) , has yet to report results for the quarter ended March 2026.
This company is expected to post quarterly loss of $0.01 per share in its upcoming report, which represents a year-over-year change of +99.2%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days.
AtlasClear Holdings, Inc.'s revenues are expected to be $5.22 million, up 105.5% from the year-ago quarter.
Digitale Bankplattform übersteigt 42 Mrd. Real an Einlagen und 5 Mrd. Real an Krediten, unterstützt durch den Ausbau der Bankplattform und den operativen Leverage im Berichtszeitraum
, /PRNewswire/ -- PagBank (NYSE: PAGS), eine der größten digitalen Bankplattformen Brasiliens und Spezialist für die Betreuung brasilianischer Unternehmer, gibt seine Ergebnisse für das erste Quartal 2026 (1Q26) bekannt.
Der wiederkehrende Nettogewinn belief sich in diesem Quartal auf 575 Millionen Real, 4 % mehr als im Vorjahr.
(Credit: PagBank) „Wir haben das Jahr mit konsistenten Ergebnissen begonnen, selbst in einem schwierigeren makroökonomischen Umfeld, was die Stärke unserer Strategie und Umsetzungsdisziplin unterstreicht. Der Berichtszeitraum war geprägt von Ertragssteigerungen, der kontinuierlichen Weiterentwicklung unserer Bankplattform sowie von Effizienzsteigerungen und operativem Leverage", sagt Gustavo Sechin, CFO der PagBank.
Die Nettoeinnahmen erreichten in diesem Quartal 3,3 Milliarden Real, was einem Wachstum von 6 % im Vergleich zum Vorjahreszeitraum entspricht, das vor allem auf das beschleunigte Wachstum der Bankplattform zurückzuführen ist.
Der Höhepunkt war nach wie vor das starke Wachstum der Bankerträge, die im Jahresvergleich um 41 % zunahmen. Infolgedessen stieg der ROAE auf 15,8 %, 80 Basispunkte mehr als im Vorjahr, was das verbesserte Rentabilitätsprofil des Unternehmens unterstreicht.
Die Einlagen beliefen sich auf insgesamt 42 Mrd. Real, was einem Anstieg von 23 % gegenüber dem Vorjahr entspricht und das Vertrauen der Kunden und die Stärke der Kapitalstruktur des Unternehmens widerspiegelt, die auch durch die AAA-Ratings der drei größten globalen Kreditratingagenturen gestützt wird. Das Kreditportfolio erreichte 5 Mrd. Real und wuchs damit im Jahresvergleich um 36 %. Zu den Höhepunkten zählen Betriebsmittelkredite, die 191 % im Jahresvergleich wuchsen, sowie Kreditkarten und Gehaltsabrechnungskredite.
Die PagBank beendete das Quartal mit 34 Millionen Kunden, 6 % mehr als im Vorjahr, und einer Basis von 6,3 Millionen Händlern und Unternehmern. Infolgedessen belief sich das Cash-in-Volumen - einschließlich der Zuflüsse auf unsere PagBank-Konten - im Berichtszeitraum auf insgesamt 81 Mrd. Real, was einem Anstieg von 11 % gegenüber dem Vorjahr entspricht.
„Wir sind eine voll integrierte Bankplattform, die sich auf brasilianische Unternehmer spezialisiert hat. Wir investieren weiterhin in Produkte und Dienstleistungen, die unseren Kunden helfen, ihre Geschäfte erfolgreich zu führen. Unser Wachstum wird weiterhin von der Einfachheit, Solidität und Innovation eines der größten Finanzinstitute des Landes angetrieben werden", sagt Carlos Maud, CEO der PagBank.
Die PagBank, die sich auf kleine und mittlere Unternehmen konzentriert, bietet weiterhin eine umfassende, einzigartige Plattform, die Zahlungsverkehr, Bankdienstleistungen und Kreditlösungen integriert. Im Einklang mit seinem Ziel, das finanzielle Leben von Menschen und Unternehmen zu vereinfachen, betreibt das Unternehmen ein integriertes digitales Ökosystem, das das Finanzmanagement mit mehr Effizienz, Sicherheit, Digitalisierung und Zugang zu Finanzlösungen unterstützt.
Der Jahresabschluss der PagBank für das 1. Quartal 2026 kann hier abgerufen werden.
Zukunftsgerichtete Aussagen
Diese Mitteilung enthält zukunftsgerichtete Aussagen im Sinne des U.S. Private Securities Litigation Reform Act von 1995, Abschnitt 27A des Securities Act von 1933 in seiner aktuellen Fassung und Abschnitt 21E des Securities Exchange Act von 1934. Alle Aussagen, die keine historischen Tatsachen darstellen, einschließlich, aber nicht beschränkt auf Aussagen über die Erwartungen, Absichten, Überzeugungen oder Strategien des Unternehmens, sind zukunftsgerichtete Aussagen. Begriffe wie „erwartet", „geht davon aus", „beabsichtigt", „plant", „glaubt", „schätzt", „sollte", „könnte", „wird" und Variationen solcher Begriffe sowie ähnliche Ausdrücke dienen dazu, solche zukunftsgerichteten Aussagen zu kennzeichnen. Diese Aussagen spiegeln die aktuellen Ansichten der Unternehmensleitung wider und unterliegen verschiedenen Risiken und Unsicherheiten. Sie beruhen auf zahlreichen Annahmen und Faktoren, darunter Wirtschafts- und Marktbedingungen, Branchenbedingungen und betriebliche Faktoren. Jede Änderung dieser Annahmen oder Faktoren kann dazu führen, dass die tatsächlichen Ergebnisse wesentlich von den aktuellen Erwartungen des Unternehmens abweichen.
Informationen zur PagBank
Die PagBank fördert innovative Lösungen im Bereich der Finanzdienstleistungen und Zahlungsmethoden, indem sie den Kauf-, Verkaufs- sowie Überweisungsprozess automatisiert, um das Geschäft jeder Person oder jedes Unternehmens einfach und sicher zu fördern. Die PagBank, ein Unternehmen der UOL Group – Brasiliens führendem Internetunternehmen – fungiert als Emittent sowie Acquirer und bietet digitale Konten sowie Komplettlösungen für Online- und Präsenzzahlungen (über mobile und POS-Geräte). Die PagBank bietet zudem verschiedene Zahlungsmethoden an, darunter Kredit- und Prepaid-Karten, Banküberweisungen, Boleto-Zahlungen sowie Kontoguthaben, um nur einige zu nennen. Die Solidität des Instituts wird durch die von drei führenden globalen Bewertern vergebenen Bestnoten (AAA / Triple A) anerkannt, die eines der höchsten Niveaus an Zuverlässigkeit auf dem Markt bescheinigen - ein Unterscheidungsmerkmal, das die Sicherheit, die solide Unternehmensführung und die beständige Fähigkeit zur Erfüllung der finanziellen Verpflichtungen unterstreicht. PagBank (PagSeguro Internet Instituição de Pagamento S.A.) wird von der brasilianischen Zentralbank als Zahlungsinstitut, Emittent von elektronischem Geld, Emittent von Postpaid-Instrumenten sowie Acquirer reguliert und unterhält Partnerschaften mit den führenden Kartenmarken. Die Muttergesellschaft, PagSeguro Digital Ltd, wird an der New Yorker Börse (NYSE: PAGS) gehandelt und wird von der Securities and Exchange Commission (SEC) reguliert. Der Vertrieb von Investmentfonds wird von der BancoSeguro S.A. durchgeführt, die von der brasilianischen Zentralbank sowie der Börsenaufsichtsbehörde zugelassen und mit der ANBIMA verbunden ist.
PRESSEKONTAKTE
XCOM by Atrevia - der Kommunikationsagentur der PagBank: [email protected]
PagSeguro Digital NYSE: PAGS, which operates as PagBank, reported higher first-quarter earnings per share and continued expansion in its banking and credit operations, while management said elevated Brazilian interest rates continued to pressure financial costs and gross profit.
On the company’s first-quarter 2026 earnings call, Principal Executive Officer Ricardo Dutra said PagBank made “continued progress” executing its strategy, with banking and credit acceleration and operating leverage contributing to earnings growth despite a challenging macroeconomic backdrop.
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Total Payment Volume reached BRL 128 billion in the quarter, flat year over year. Dutra said the result confirmed a gradual reacceleration compared with prior quarters. The company’s expanded credit portfolio reached BRL 51 billion, up 11% from a year earlier, while total loans grew 36% year over year. Deposits rose 23% to BRL 42 billion.
Net revenue excluding interchange fees was BRL 3.3 billion, up 6.4% year over year, driven mainly by credit acceleration and banking performance. Recurring non-GAAP net income reached BRL 575 million, up 4%. Dutra said the result was affected by higher financial expenses tied to Brazil’s base interest rate, partially offset by operating leverage. Diluted non-GAAP EPS increased 12% year over year, helped by capital optimization initiatives.
Banking and Credit Remain Key Growth Areas CEO Carlos Mauad said PagBank’s integrated payments, banking and credit platform serves individuals and micro, small and medium-sized businesses. He said the company sees significant room to grow in several banking segments where its market share is currently below 1%.
Mauad highlighted increased customer engagement across PagBank’s ecosystem. Cash-in volumes, excluding acquiring-related inflows, reached BRL 81 billion, up 11% year over year, while cash-in active clients grew 12%. He attributed the performance to stronger usage of the platform, including bill payments, Pix transactions and increased penetration of investment and insurance products.
PagBank’s total credit portfolio reached BRL 5 billion at the end of the quarter, growing 36% year over year. Mauad said credit growth was broad-based across products and channels, with working capital loans leading the expansion. Working capital grew 191% year over year and represented 10% of the total portfolio.
Management said asset quality remained controlled. Mauad noted that nonperforming loan indicators were well below the Brazilian banking system average, while later in the call he said PagBank’s NPLs were “almost half of the industry.” He said the company is gradually shifting from a mostly secured credit portfolio toward a more balanced mix as it expands underwriting for unsecured products.
Funding Costs Decline as Deposits Grow Mauad said deposits reached BRL 42 billion, with more than 90% sourced from PagBank’s own platform. Including other funding sources such as related-party deposits and borrowings, total funding was nearly BRL 47 billion, up 15% year over year.
The company’s deposit annual percentage yield fell for the eighth straight quarter, reaching 83.9% of CDI in the first quarter. Mauad said average remuneration on demand deposits was 38.6% of CDI, down 10 percentage points year over year. The loan-to-funding ratio improved to 109% from 114% a year earlier.
In response to analyst questions, CFO Gustavo Sechin said PagBank has implemented disciplined repricing and reductions in remuneration on certificates of deposit and checking accounts to mitigate higher financial costs. He said the company is still identifying additional opportunities to address funding cost pressures, while Mauad said some changes made near the end of the first quarter should continue to affect results going forward.
Financial Costs Weigh on Gross Profit Sechin said total revenue and income excluding interchange fees grew 6.4% to BRL 3.3 billion, driven primarily by banking and credit expansion. Banking revenue increased 41% year over year, supported by credit growth and higher transactionality from clients. Gross profit totaled BRL 1.9 billion, up nearly 1% year over year, with banking representing about 31% of total gross profit.
However, Sechin said the company continued to face pressure from rising financial costs due to Brazil’s higher benchmark interest rate. He said the Selic rate was up 1.9 percentage points over the period, although the effect was partially mitigated by lower deposit APY. Sequentially, financial costs declined 2.6%.
Total losses, including acquiring chargebacks and expected credit loss provisions, rose 29% year over year, mainly reflecting credit portfolio expansion and mix changes. On the acquiring side, chargebacks fell 15% year over year, which Sechin attributed to improved fraud prevention.
Sechin pointed to operating leverage as a key highlight, saying operating expenses declined as a percentage of revenue by about 230 basis points year over year. He cited cost discipline and the use of artificial intelligence in areas such as client service. During the Q&A session, he said the company is “just in the beginning” of opportunities to generate further operating leverage.
Shareholder Returns and Capital Optimization Dutra said PagBank returned approximately BRL 2.4 billion to shareholders over the last 12 months through dividends and share buybacks, representing a total yield of around 16% over that period. Sechin said the company is working to bring its Basel index to between 18% and 22% in coming years.
PagBank’s managerial Basel ratio stood at 24.1%, down more than four percentage points from the prior quarter. Sechin said the level still provides ample capacity to support credit expansion and shareholder returns.
The company plans to distribute an additional BRL 400 million in dividends in June, equivalent to $0.26 per common share, in line with its commitment to distribute at least BRL 1.4 billion in dividends this year.
Management Reaffirms 2026 Guidance Sechin said PagBank ended the first quarter above its expected range for credit portfolio growth and expects consistent growth through the year. He said gross profit expansion was limited in the first quarter due to Selic-related financial cost pressure, but management expects those headwinds to fade in the second quarter and beyond.
In response to UBS analyst Kaio Da Prato, Mauad said TPV trends have improved from a 5% year-over-year decline in the third quarter of last year to a roughly 2% decline in the fourth quarter and flat growth in the first quarter. He said management expects TPV to turn positive in the second quarter and accelerate in the second half.
Asked about competition, Mauad said the small and midsize business landscape has been broadly stable over the past 24 months, naming PagBank, Stone, Mercado Pago and CloudWalk as key players in that segment. He said competitors posting 20% to 25% TPV growth are often serving different customer clusters, including enterprise clients and “serial acquirers.”
Mauad also said PagBank expects credit growth to accelerate in 2027, citing the current macro environment and the fact that some products are still in pilot or development. He identified payroll loans for private-company employees as one area with potential, while noting the company remains cautious on unsecured lending.
“We are confident to achieve our 2026 guidance,” Mauad said, adding that PagBank remains focused on operational excellence, disciplined expansion and consistent value creation as it works toward its 2029 targets.
About PagSeguro Digital NYSE: PAGSPagSeguro Digital Ltd. is a Brazil-based financial technology company that specializes in digital payment solutions for merchants and consumers. Through its online platform and a suite of physical point-of-sale devices, the company enables businesses of all sizes to accept credit and debit cards, process e-commerce transactions, and manage payments via QR codes and digital wallets. In addition to payment acceptance, PagSeguro offers prepaid accounts, funds transfers, and working-capital credit lines designed to support small and medium-sized enterprises.
The company's product portfolio includes portable card readers, countertop terminals, and mobile point-of-sale devices that connect via Bluetooth or cellular networks.
This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected].
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As the artificial intelligence (AI) space continues to evolve rapidly, some investors are looking for better opportunities than Nvidia (NVDA 3.39%) and Broadcom (AVGO 4.86%). Those megacap AI chipmakers developed some of the foundational hardware upon which AI software depends, and their data center sales have already been hugely beneficial to their bottom lines, and to their shareholders.
However, the AI processing platforms they make include a bunch of smaller components, many of which they acquire from other tech specialists.
For instance, you will find multiple memory chips in every single AI chip. Most investors were still ignoring this opportunity a couple of years ago, but recognition of it has gone mainstream. And as demand for high-end memory has surged well past manufacturers' ability to supply, earnings for leaders in the space, such as Sandisk (SNDK 0.04%), have surged. That memory stock has gained roughly 4,000% in a single year. If you had put $25,000 into Sandisk one year ago, you would have a position worth just over $1 million today.
AI processing chip companies are still solid picks for your portfolio, but with memory chipmakers reporting higher one-year gains, it's natural for investors to consider putting some money into some of them, too.
Image source: Getty Images.
A sharp upsurge in memory demand The opportunity in AI chipmakers is well documented at this point. Nvidia was the first big name to capitalize on the AI trend due to its powerful graphics processing units (GPUs), which can handle all sorts of parallel-processing workloads. Then, Broadcom gained attention for its application-specific integrated circuits (ASICs). The company works directly with individual hyperscaler customers to design custom chips that are optimized for the precise types of workloads they will encounter, so they can handle those AI workloads more efficiently and cheaply than Nvidia's general-purpose processors.
Nvidia and Broadcom are now both multitrillion-dollar companies. So some investors looking for growth stocks have gravitated toward "smaller" AI chipmakers like AMD and Marvell Technology, but AMD looks poised to become a trillion-dollar company within the next one to two years.
For awhile, investors didn't have much incentive to look closely at memory stocks. Micron (MU 3.81%) only produced a 14% return from 2021 to 2024, and that total return came with significant volatility. Memory specialist Western Digital (WDC 5.17%) -- which until 2025 owned what is now Sandisk, and is now focused on hard drives -- didn't even muster a 10% return over those four years.
But with demand for memory companies' wares surging, investors are now paying attention. Micron and Western Digital have both more than doubled year to date, suddenly casting a bright spotlight on memory stocks. Sandisk, the biggest winner of 2026, is up by more than 400% year to date.
Naturally, most of the attention is going toward big winners like Micron and Sandisk. Fewer people are looking at the underlying technology -- NAND, DRAM, and HBM -- and searching for smaller companies that are also involved with that technology.
For instance, consider a company like Silicon Motion Technology (SIMO 3.11%), which produces NAND flash controller chips, a crucial part of the memory trade. It doubled its sales year over year in the first quarter, reached a net profit margin of almost 20%, and still has a market cap under $10 billion. Management's guidance points toward meaningful growth in future quarters. Good luck finding a small AI chipmaker with numbers like those that investors haven't already steeply bid up in price.
Memory chipmakers are exhibiting the same growth that AI chipmakers did a few years ago It's not an exaggeration to say the digital memory segment offers a second chance for investors who missed out on the rise of AI chip stocks. Nvidia and Micron are the leaders of their respective industries.
Nvidia's earnings still show strong growth, while Micron's parabolic growth resembles what Nvidia was doing a few years ago.
Let's start with Nvidia, which delivered 73% year-over-year revenue growth in the 2026 fourth quarter (which ended on Jan. 25, 2026). It also produced 20% sequential sales growth, and management offered bullish views about its backlog.
In its report for its fiscal 2026 second quarter (which ended Feb. 26), the outlook Micron provided also offered a bullish view of its future earnings. And its growth rates are blowing Nvidia's away. Sales almost tripled year over year, and net income surged by 771%. Micron also delivered 75% sequential revenue growth.
Such comparisons apply across the board in the memory niche. Sandisk is growing much faster than Broadcom, and you can say the same thing about Western Digital versus AMD.
For Nvidia, we have to go back to its fiscal 2024 (which ended on Jan. 28, 2024) to find a time when the company more than doubled its revenues annually. In that fiscal year's Q4, it generated 265% year-over-year top-line growth in a single quarter. Nvidia was trading at roughly $60 back then, on a split-adjusted basis, and has almost quadrupled since then.
Given the momentum in the memory sector, the strong guidance that these companies are offering, and the way memory stocks are mirroring what AI chipmakers did a few years ago, it looks like they are still in the early innings of their AI-driven uptrend.
Memory stocks have boomed during the past year as more investors recognize the connection between AI chips and memory chips. No stock seems to be as hot as Sandisk (SNDK 0.04%), which is up by more than 3,000% during that time. It's also up by almost 500% year to date, so it's natural that some investors are looking for a smaller version of the company.
Silicon Motion Technology (SIMO 3.11%) may be the answer. It's a fellow beneficiary of the memory solutions boom, and with a market cap of less than $10 billion, it still remains relatively unknown.
Image source: Getty Images.
How Sandisk and Silicon Motion Technology benefit from memory demand Sandisk and Silicon Motion Technology have both reported tremendous sequential growth, but before getting into any numbers, it's important to understand how both of these businesses work.
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Sandisk produces NAND flash chips and memory products. This technology stores data and acts as the backbone for many AI models. They are a key part of the AI boom.
However, NAND flash chips are like a band without a director. Those chips do not know what to do if a director isn't guiding them. Directors and bands need each other, and that's the relationship between these two companies. Silicon Motion Technology produces NAND flash controllers that instruct Sandisk's NAND flash chips. Every semiconductor with NAND flash chips needs a NAND flash controller, giving Silicon Motion Technology direct exposure to Sandisk's success.
Sandisk makes its own NAND flash controllers and turns to Silicon Motion Technology for additional controllers. Silicon Motion Technology touts itself as a company that supports NAND flash components from Sandisk, Micron, and other heavy hitters in the memory storage build-out. That gives it direct exposure to the industry.
Silicon Motion Technology is gaining attention Although Silicon Motion Technology remained an under-the-radar pick while Sandisk and Micron soared to start the year, that cat got out of the bag when the company reported first-quarter earnings on April 28.
In the week of April 27, investors traded 9.9 million shares, the stock's most active week during the past year. The following week, almost 7 million shares swapped hands, making it the stock's third-most-active week. Volume remains elevated to this day.
All of that volume came because Silicon Motion Technology reported 23% sequential revenue growth in Q1 while offering a blowout forecast. The company expects high sequential growth each quarter for the rest of the year.
AI memory companies have shown that sequential growth can accelerate quickly and exceed projections. Sandisk delivered 31% sequential growth in its second fiscal quarter of 2026, which ended on Jan. 2. Sandisk's outlook had implied $4.6 billion in Q3 FY 2026 revenue at the midpoint, but its results came in at $5.95 billion. That significant beat represented 97% sequential growth.
Those results show how quickly an AI company can grow. Silicon Motion Technology also crushed its projections with $342.1 million in Q1 revenue. The company told investors to expect as much as $306 million in Q1 revenue when it released Q4 2025 results.
Silicon Motion Technology shares have almost doubled since the company released its Q1 results, and the stock has almost tripled year to date.
This is a multiyear cycle One of the weaknesses with semiconductor stocks like Silicon Motion Technology and Sandisk is that they operate in cyclical industries. During shortages, semiconductor companies produce more chips and other supplies to meet rising demand. They can charge high prices during shortages, but once supply issues wane, these companies are stuck with large inventory gluts, which lead to price cuts and narrower profit margins.
However, the AI infrastructure build-out is still in its early stages. Nvidia regularly runs out of AI chips to sell, with lengthy timelines for customers who want chips right now. SK Hynix told investors back in October that it sold all of its memory chips allocated for 2026. Its high-bandwidth chips are different from what Sandisk and Silicon Motion Technology offer, but they are all part of the AI infrastructure build-out.
Strong demand from tech companies and ambitious outlooks tied to AI expansion suggest we are in the middle of a multiyear cycle that should benefit the memory storage industry. Sandisk has been one of the biggest winners in the stock market, but Silicon Motion Technology has a shot at producing similar returns in the long run.
Investors are starting to circle the company and pour capital into its stock.
When deciding whether to buy, sell, or hold a stock, investors often rely on analyst recommendations. Media reports about rating changes by these brokerage-firm-employed (or sell-side) analysts often influence a stock's price, but are they really important?
Let's take a look at what these Wall Street heavyweights have to say about Silicon Motion (SIMO - Free Report) before we discuss the reliability of brokerage recommendations and how to use them to your advantage.
Silicon Motion currently has an average brokerage recommendation (ABR) of 1.09, on a scale of 1 to 5 (Strong Buy to Strong Sell), calculated based on the actual recommendations (Buy, Hold, Sell, etc.) made by 11 brokerage firms. An ABR of 1.09 approximates between Strong Buy and Buy.
Of the 11 recommendations that derive the current ABR, 10 are Strong Buy and one is Buy. Strong Buy and Buy respectively account for 90.9% and 9.1% of all recommendations.
Brokerage Recommendation Trends for SIMO
Check price target & stock forecast for Silicon Motion here>>>
The ABR suggests buying Silicon Motion, but making an investment decision solely on the basis of this information might not be a good idea. According to several studies, brokerage recommendations have little to no success guiding investors to choose stocks with the most potential for price appreciation.
Are you wondering why? The vested interest of brokerage firms in a stock they cover often results in a strong positive bias of their analysts in rating it. Our research shows that for every "Strong Sell" recommendation, brokerage firms assign five "Strong Buy" recommendations.
This means that the interests of these institutions are not always aligned with those of retail investors, giving little insight into the direction of a stock's future price movement. It would therefore be best to use this information to validate your own analysis or a tool that has proven to be highly effective at predicting stock price movements.
With an impressive externally audited track record, our proprietary stock rating tool, the Zacks Rank, which classifies stocks into five groups, ranging from Zacks Rank #1 (Strong Buy) to Zacks Rank #5 (Strong Sell), is a reliable indicator of a stock's near-term price performance. So, validating the Zacks Rank with ABR could go a long way in making a profitable investment decision.
ABR Should Not Be Confused With Zacks RankAlthough both Zacks Rank and ABR are displayed in a range of 1--5, they are different measures altogether.
The ABR is calculated solely based on brokerage recommendations and is typically displayed with decimals (example: 1.28). In contrast, the Zacks Rank is a quantitative model allowing investors to harness the power of earnings estimate revisions. It is displayed in whole numbers -- 1 to 5.
It has been and continues to be the case that analysts employed by brokerage firms are overly optimistic with their recommendations. Because of their employers' vested interests, these analysts issue more favorable ratings than their research would support, misguiding investors far more often than helping them.
On the other hand, earnings estimate revisions are at the core of the Zacks Rank. And empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.
In addition, the different Zacks Rank grades are applied proportionately to all stocks for which brokerage analysts provide current-year earnings estimates. In other words, this tool always maintains a balance among its five ranks.
There is also a key difference between the ABR and Zacks Rank when it comes to freshness. When you look at the ABR, it may not be up-to-date. Nonetheless, since brokerage analysts constantly revise their earnings estimates to reflect changing business trends, and their actions get reflected in the Zacks Rank quickly enough, it is always timely in predicting future stock prices.
Should You Invest in SIMO?Looking at the earnings estimate revisions for Silicon Motion, the Zacks Consensus Estimate for the current year has increased 46.7% over the past month to $8.37.
Analysts' growing optimism over the company's earnings prospects, as indicated by strong agreement among them in revising EPS estimates higher, could be a legitimate reason for the stock to soar in the near term.
The size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, has resulted in a Zacks Rank #1 (Strong Buy) for Silicon Motion. You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>
Therefore, the Buy-equivalent ABR for Silicon Motion may serve as a useful guide for investors.
TAIPEI, Taiwan and MILPITAS, Calif., May 18, 2026 (GLOBE NEWSWIRE) -- Silicon Motion Technology Corporation (NasdaqGS: SIMO), a global leader in designing and marketing NAND flash controllers for solid state storage devices and automotive and boot drive solutions, today announced that it will participate in the following upcoming conferences:
J.P. Morgan 54th Annual Global Technology, Media and Communications Conference
Tuesday, May 19, 2026, 11:25 a.m. EDT (webcast)
The Westin Boston Seaport District, Boston, MA
B. Riley Securities 26th Annual Institutional Investor Conference
Wednesday, May 20, 2026 (meetings only)
The Ritz-Carlton, Marina Del Rey, Los Angeles, CA
Morgan Stanley Asia AI Summit 2026
Thursday, May 28, 2026 (meetings only)
The Mandarin Oriental, Taipei
2026 Evercore Global TMT Conference
Tuesday, June 2, 2026, 5:10 p.m. EDT (webcast)
The Omni San Francisco, CA
Citi’s 2026 Taiwan Tech Conference
Wednesday, June 3, 2026 (meetings only)
W Hotel Taipei, Taipei
Bank of America Securities 2026 Asia Conference in New York
Tuesday, June 9, 2026 (meetings only)
Bank of America Tower, One Bryant Park, West 42nd Street, New York, NY
When available, interested parties can listen to a live audio webcast of the Company’s presentation on the Investor Relations section of Silicon Motion’s website at www.siliconmotion.com. A replay of the webcast will be available for 90 days following the event.
About Silicon Motion:
We are the global leader in supplying NAND flash controllers for solid state storage devices. We supply more SSD controllers than any other company in the world for servers, PCs and other client devices and are the leading merchant supplier of eMMC and UFS embedded storage controllers used in smartphones, IoT devices and other applications. We also supply customized high-performance hyperscale data center and specialized industrial and automotive SSD solutions. Our customers include most of the NAND flash vendors, storage device module makers and leading OEMs. For further information on Silicon Motion, visit us at www.siliconmotion.com.
Silicon Motion (SIMO - Free Report) has recently been on Zacks.com's list of the most searched stocks. Therefore, you might want to consider some of the key factors that could influence the stock's performance in the near future.
Shares of this chip company have returned +86.1% over the past month versus the Zacks S&P 500 composite's +5.6% change. The Zacks Computer - Integrated Systems industry, to which Silicon Motion belongs, has gained 46.4% over this period. Now the key question is: Where could the stock be headed in the near term?
Although media reports or rumors about a significant change in a company's business prospects usually cause its stock to trend and lead to an immediate price change, there are always certain fundamental factors that ultimately drive the buy-and-hold decision.
Revisions to Earnings EstimatesHere at Zacks, we prioritize appraising the change in the projection of a company's future earnings over anything else. That's because we believe the present value of its future stream of earnings is what determines the fair value for its stock.
We essentially look at how sell-side analysts covering the stock are revising their earnings estimates to reflect the impact of the latest business trends. And if earnings estimates go up for a company, the fair value for its stock goes up. A higher fair value than the current market price drives investors' interest in buying the stock, leading to its price moving higher. This is why empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.
For the current quarter, Silicon Motion is expected to post earnings of $1.98 per share, indicating a change of +187% from the year-ago quarter. The Zacks Consensus Estimate has changed +64.3% over the last 30 days.
The consensus earnings estimate of $8.37 for the current fiscal year indicates a year-over-year change of +135.8%. This estimate has changed +46.7% over the last 30 days.
For the next fiscal year, the consensus earnings estimate of $10.45 indicates a change of +24.8% from what Silicon Motion is expected to report a year ago. Over the past month, the estimate has changed +33.5%.
With an impressive externally audited track record, our proprietary stock rating tool -- the Zacks Rank -- is a more conclusive indicator of a stock's near-term price performance, as it effectively harnesses the power of earnings estimate revisions. The size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, has resulted in a Zacks Rank #1 (Strong Buy) for Silicon Motion.
The chart below shows the evolution of the company's forward 12-month consensus EPS estimate:
12 Month EPS
Projected Revenue GrowthEven though a company's earnings growth is arguably the best indicator of its financial health, nothing much happens if it cannot raise its revenues. It's almost impossible for a company to grow its earnings without growing its revenue for long periods. Therefore, knowing a company's potential revenue growth is crucial.
For Silicon Motion, the consensus sales estimate for the current quarter of $401.53 million indicates a year-over-year change of +102.1%. For the current and next fiscal years, $1.56 billion and $1.84 billion estimates indicate +76.3% and +17.5% changes, respectively.
Last Reported Results and Surprise HistorySilicon Motion reported revenues of $342.11 million in the last reported quarter, representing a year-over-year change of +105.5%. EPS of $1.58 for the same period compares with $0.6 a year ago.
Compared to the Zacks Consensus Estimate of $299.49 million, the reported revenues represent a surprise of +14.23%. The EPS surprise was +20.61%.
Over the last four quarters, Silicon Motion surpassed consensus EPS estimates three times. The company topped consensus revenue estimates each time over this period.
ValuationNo investment decision can be efficient without considering a stock's valuation. Whether a stock's current price rightly reflects the intrinsic value of the underlying business and the company's growth prospects is an essential determinant of its future price performance.
While comparing the current values of a company's valuation multiples, such as price-to-earnings (P/E), price-to-sales (P/S), and price-to-cash flow (P/CF), with its own historical values helps determine whether its stock is fairly valued, overvalued, or undervalued, comparing the company relative to its peers on these parameters gives a good sense of the reasonability of the stock's price.
The Zacks Value Style Score (part of the Zacks Style Scores system), which pays close attention to both traditional and unconventional valuation metrics to grade stocks from A to F (an A is better than a B; a B is better than a C; and so on), is pretty helpful in identifying whether a stock is overvalued, rightly valued, or temporarily undervalued.
Silicon Motion is graded F on this front, indicating that it is trading at a premium to its peers. Click here to see the values of some of the valuation metrics that have driven this grade.
Bottom LineThe facts discussed here and much other information on Zacks.com might help determine whether or not it's worthwhile paying attention to the market buzz about Silicon Motion. However, its Zacks Rank #1 does suggest that it may outperform the broader market in the near term.
TAIPEI, Taiwan & MILPITAS, Calif.--(BUSINESS WIRE)---- $SIMO #ADAS--Silicon Motion Technology Corporation (NasdaqGS: SIMO) ("Silicon Motion"), a global leader in designing and marketing NAND flash controllers for solid-state storage devices, today announced that it has successfully achieved ISO 26262 functional safety process certification for automotive applications. ISO 26262 is the international standard for functional safety in road vehicles, establishing rigorous requirements for the development and valid.
TAIPEI, Taiwan & MILPITAS, Calif.--(BUSINESS WIRE)-- #ADAS--Silicon Motion Technology Corporation (NasdaqGS: SIMO) ("Silicon Motion"), a global leader in designing and marketing NAND flash controllers for solid-state storage devices, today announced that it has successfully achieved ISO 26262 functional safety process certification for automotive applications. ISO 26262 is the international standard for functional safety in road vehicles, establishing rigorous requirements for the development and valid.
Momentum investing is all about the idea of following a stock's recent trend, which can be in either direction. In the "long context," investors will essentially be "buying high, but hoping to sell even higher." And for investors following this methodology, taking advantage of trends in a stock's price is key; once a stock establishes a course, it is more than likely to continue moving in that direction. The goal is that once a stock heads down a fixed path, it will lead to timely and profitable trades.
While many investors like to look for momentum in stocks, this can be very tough to define. There is a lot of debate surrounding which metrics are the best to focus on and which are poor quality indicators of future performance. The Zacks Momentum Style Score, part of the Zacks Style Scores, helps address this issue for us.
Below, we take a look at Silicon Motion (SIMO - Free Report) , a company that currently holds a Momentum Style Score of A. We also talk about price change and earnings estimate revisions, two of the main aspects of the Momentum Style Score.
It's also important to note that Style Scores work as a complement to the Zacks Rank, our stock rating system that has an impressive track record of outperformance. Silicon Motion currently has a Zacks Rank of #1 (Strong Buy). Our research shows that stocks rated Zacks Rank #1 (Strong Buy) and #2 (Buy) and Style Scores of "A or B" outperform the market over the following one-month period.
You can see the current list of Zacks #1 Rank Stocks here >>>
Set to Beat the Market? In order to see if SIMO is a promising momentum pick, let's examine some Momentum Style elements to see if this chip company holds up.
A good momentum benchmark for a stock is to look at its short-term price activity, as this can reflect both current interest and if buyers or sellers currently have the upper hand. It is also useful to compare a security to its industry, as this can help investors pinpoint the top companies in a particular area.
For SIMO, shares are up 2.52% over the past week while the Zacks Computer - Integrated Systems industry is flat over the same time period. Shares are looking quite well from a longer time frame too, as the monthly price change of 85.57% compares favorably with the industry's 5.3% performance as well.
Considering longer term price metrics, like performance over the last three months or year, can be advantageous as well. Over the past quarter, shares of Silicon Motion have risen 101.03%, and are up 304.96% in the last year. In comparison, the S&P 500 has only moved 8.01% and 28.78%, respectively.
Investors should also pay attention to SIMO's average 20-day trading volume. Volume is a useful item in many ways, and the 20-day average establishes a good price-to-volume baseline; a rising stock with above average volume is generally a bullish sign, whereas a declining stock on above average volume is typically bearish. SIMO is currently averaging 1,378,541 shares for the last 20 days.
Earnings OutlookThe Zacks Momentum Style Score also takes into account trends in estimate revisions, in addition to price changes. Please note that estimate revision trends remain at the core of Zacks Rank as well. A nice path here can help show promise, and we have recently been seeing that with SIMO.
Over the past two months, 5 earnings estimates moved higher compared to none lower for the full year. These revisions helped boost SIMO's consensus estimate, increasing from $5.79 to $8.37 in the past 60 days. Looking at the next fiscal year, 5 estimates have moved upwards while there have been no downward revisions in the same time period.
Bottom LineTaking into account all of these elements, it should come as no surprise that SIMO is a #1 (Strong Buy) stock with a Momentum Score of A. If you've been searching for a fresh pick that's set to rise in the near-term, make sure to keep Silicon Motion on your short list.
Some of the best artificial intelligence (AI) stocks have multiplied investors' money in a short amount of time. Sandisk has been the ringleader of this trend, producing more than 3,000% returns over the past year.
However, if you want to find AI stocks that can turn $5,000 into at least $10,000 by 2028, it's best to look for companies that don't receive as much attention. While the first pick on this list is an exception to that rule due to its exciting growth prospects, the other two are relatively obscure.
Image source: Getty Images.
1. Alphabet Alphabet (GOOG 2.23%) (GOOGL 1.95%) has thrust itself into the center of the AI boom. While chipmakers offer the hardware, Alphabet provides software solutions that have attracted consumers and businesses.
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Google ads still bring in most of the revenue and contributed to Google Services sales increasing by 16% year over year in the first quarter. However, Google Cloud was the bigger story. AI enterprise demand resulted in that segment soaring by 63% year over year. That part of the business is a major tailwind that can continue to support revenue acceleration for several quarters.
Alphabet CEO Sundar Pichai told investors that the company's AI investments "are lighting up every part of the business." Gemini is also processing more than 16 tokens per minute, which represents 60% sequential growth. One token is equal to three to four words of input, which does not make it a complete search, but this big uptick indicates rising demand for Alphabet's AI model.
Alphabet has plenty of attractive catalysts in the near term, but it also has Waymo in the background. The autonomous driving segment of Alphabet's corporate profile has expanded and surpassed 500,000 fully autonomous rides per week.
2. Silicon Motion Technology Silicon Motion Technology (SIMO 3.11%) is a memory storage play that has rallied by more than 170% year to date. The company produces NAND flash controllers that are in many memory chips. Micron and Intel are two of the company's largest customers.
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Silicon Motion Technology is posting high sequential revenue growth similar to Micron before its stock took off. The tech company reported 23% sequential revenue growth and 105% year-over-year growth in Q1. High long-term demand for AI and memory chips suggests this cycle will last multiple years. Micron is sold out of advanced memory products through 2027. That's the type of demand driving Silicon Motion Technology's string of solid results.
Silicon Motion Technology posted optimistic guidance for Q2 that implies up to 107% year-over-year revenue growth. It's good to keep in mind that the company crushed its Q1 estimates. Even though Q2 guidance is already good, it's possible Silicon Motion Technology could exceed its targets.
3. Marvell Technology Marvell Technology (MRVL 5.35%) offers data center solutions that act as a key layer in AI infrastructure. The company produces optical components that make it easier to transfer large amounts of data between AI chips. The company also produces its own ASIC chips.
That combination of opportunities helped Marvell Technology generate a record $2.22 billion in revenue for the fiscal 2026 fourth quarter, which ended Jan. 31, 2026. That was a 22% year-over-year growth rate, which paired nicely with net income almost doubling.
Marvell Technology CEO Matt Murphy's remarks in the Q4 press release suggest more of the same moving forward. He told investors to expect accelerated revenue growth for each quarter of fiscal 2027 with bookings "continuing to grow at a record pace."
Marvell hasn't received as much attention as Micron and Alphabet, but the growth stock has more than doubled year to date. Just like Silicon Motion Technology, Marvell Technology seems to be hitting its stride. The company's fiscal 2027 Q1 guidance suggests $2.4 billion in revenue, which represents an 8% sequential improvement.
Many big tech stocks have performed well this year, with Microsoft (MSFT 1.29%) and Meta Platforms (META 2.17%) being the only "Magnificent Seven" stocks down during the past year. Those seven stocks heavily influence the Nasdaq Composite, but finding under-the-radar tech stocks can produce much higher returns.
The three stocks on this list aren't brand names, and most investors aren't paying much attention to them. However, these same growth stocks have outperformed the Nasdaq Composite this year and look poised to continue that trend.
Image source: Getty Images.
1. Iren Iren (IREN 4.63%) is a neocloud provider that produces artificial intelligence (AI) data centers for hyperscalers. Tech companies need AI data centers and energy to scale their AI ambitions, and IREN checks off both boxes. That value proposition helped Iren land a five-year deal with Microsoft for $9.7 billion in exchange for 200 megawatts of capacity.
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Investors had to wait a few months for another deal, but people accumulated Iren shares shortly after the company announced a deal with Nvidia (NVDA 3.39%) for $3.4 billion over five years. This deal includes access to 60 megawatts. Iren recently bought software company Mirantis to help with the deal. This software acquisition should attract more customers and help Iren secure higher margins in the long run.
Megawatts are the name of the game, and since Iren has a 5-gigawatt pipeline, it can generate substantial annual recurring revenue once its sites are energized and ready for business. The company anticipates $3.7 billion in contracted annual recurring revenue by the end of the year, showing that some of the momentum is taking place right now.
Iren recently penetrated European markets with a new AI data center and has also set its sights on the Asia-Pacific (APAC) region.
2. MaxLinear MaxLinear (MXL 0.91%) provides optical interconnect solutions for AI infrastructure. The company's technology helps AI chips communicate with each other and move data seamlessly. It's a better solution than traditional copper wires, which are limited in how much data they can transfer. Data transfer speed is also enhanced with optical interconnects over copper wires.
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This technological advantage is fueling growth for MaxLinear. Its first-quarter results hint at the arrival of sequential growth that helped Micron (MU 3.81%) and Sandisk (SNDK 0.04%) trounce the stock market. I saw this pattern in Silicon Motion Technology (SIMO 3.11%) before it reported Q1 earnings. That stock has tripled year to date.
MaxLinear is exhibiting the same patterns. Although the company's 43% year-over-year revenue growth in Q1 was impressive, that wasn't the most important number. Its infrastructure segment, which is mostly optical interconnects, surged 35% sequentially and jumped 136% year over year.
MaxLinear Chief Executive Officer Kishore Seendripu viewed these results as "the start of a multi-year growth phase" and said that infrastructure has become its "largest end market." He wrapped up his commentary by saying that MaxLinear is positioned for profitability in 2026 and beyond.
That's the same type of language I have heard from multiple AI companies before their shares took off a few months later, including Silicon Motion Technology. MaxLinear's Q2 guidance even offers optimism in this regard, with revenue projected to be $165 million at the midpoint. That's 20% sequential growth if MaxLinear sees its projection through.
MaxLinear is just starting to deliver high sequential growth and it's a key part of the opening the AI bottleneck. It would not shock me if the company exceeds the high end of its forecast in Q2.
3. Innodata Innodata (INOD +1.13%) is a data engineering company that collects and organizes all the data used to train AI models. ChatGPT was the first mainstream AI model in 2022, but several hyperscalers have since released their own AI models.
Innodata works with multiple big tech companies and announced in its Q1 earnings press release that it had secured a new deal with another tech giant. Although the customer wasn't indentified, Innodata said that it could generate as much as $51 million in revenue this year, compared with no revenue from this same customer just one year ago.
That addition is a big deal since Innodata earned $90.1 million in Q1, which was up by 54% year over year. If you spread the $51 million contract over four quarters, it comes to $12.75 million per quarter. Innodata used this contract and its existing customer relationships to raise its forecast. The company now expects 40% revenue growth in 2026.
Innodata's growth is accelerating while diversifying its customer base. The company's CEO, Jack Abuhoff, hinted at this in the Q1 press release.
"For full year 2026, we expect our largest customer to represent a smaller percentage of total revenue even though we expect our absolute dollar revenue with that customer to increase. In Q1, revenue from our other Big Tech customers, in the aggregate, grew 453% year-over-year," Abuhoff said.
TAIPEI, Taiwan--(BUSINESS WIRE)-- #AIStorage--Silicon Motion Technology Corporation (NasdaqGS: SIMO) (“Silicon Motion”), a global leader in designing and marketing NAND flash controllers for solid-state storage devices, today announced that it will showcase its latest optimized storage innovations for Edge AI, Physical AI, and AI Factory applications at COMPUTEX 2026. As AI architectures rapidly evolve from cloud training to edge inference and autonomous physical AI systems, storage is emerging as a foundat.
TAIPEI, Taiwan--(BUSINESS WIRE)-- #EdgeAI--Silicon Motion Technology Corporation (NasdaqGS: SIMO), a global leader in NAND flash controllers for solid-state storage devices, today announced the SM2524XT, a next-generation PCIe Gen5 DRAMless SSD controller purpose-built for AI inference and KV Cache-intensive workloads. The SM2524XT leverages a new four-processor-core architecture with PCIe Gen5 x4 and NAND interface speeds up to 4,800 MT/s to achieve sequential read speeds up to 14 GB/s and industry-lead.
Delivering Industry-Leading 2.5M IOPS Random Performance for AI Inference and KV Cache Workloads
TAIPEI, Taiwan--(BUSINESS WIRE)--Silicon Motion Technology Corporation (NasdaqGS:SIMO), a global leader in NAND flash controllers for solid-state storage devices, today announced the SM2524XT, a next-generation PCIe Gen5 DRAMless SSD controller purpose-built for AI inference and KV Cache-intensive workloads. The SM2524XT leverages a new four-processor-core architecture with PCIe Gen5 x4 and NAND interface speeds up to 4800 MT/s to achieve sequential read speeds up to 14 GB/s and industry-leading random performance of up to 2.5 million IOPS.
Built on TSMC’s advanced 6nm process technology, the SM2524XT delivers up to 25 percent higher performance per watt compared to the previous generation controller, sustaining peak random I/O throughput even under the most demanding thermal and power constrained conditions. Against the previous generation controller, the SM2524XT improves random performance by up to 25 percent, slashing latency and accelerating response times for the highly fragmented data access patterns that define KV Cache and AI inference workloads.
“KV Cache has become a critical factor in AI inference performance, driving the need for sustained high random read/write throughput and low-latency data access,” said Nelson Duann, Senior VP of Client & Automotive Storage Business at Silicon Motion. “As AI PCs evolve to support increasingly complex Local Agent and on-device LLM workloads, the SM2524XT is designed to deliver the random I/O performance, latency stability, and power efficiency required for next-generation AI storage architectures.”
As on-device AI inference scales in complexity, KV Cache has become the decisive storage bottleneck separating responsive AI PCs from sluggish ones. Unlike conventional consumer SSD workloads, KV Cache generates relentless streams of highly fragmented, latency-sensitive random read/write operations that demand sustained IOPS throughput and rock-solid low-latency performance under continuous load. The SM2524XT was engineered from the ground up to conquer these AI-driven access patterns, maintaining stable random I/O performance even during the most demanding sustained inference sessions.
The SM2524XT integrates Silicon Motion’s Separated Command Address (SCA) technology, advanced FTL scheduling, and NANDXtend LDPC ECC technologies to improve parallel data processing efficiency, reduce latency interruptions, and maintain consistent performance during sustained AI workloads.
For more information, please visit www.siliconmotion.com
About Silicon Motion:
Silicon Motion Technology Corporation (NasdaqGS: SIMO) is the global leader in supplying NAND flash controllers for solid-state storage devices. The company ships more SSD controllers than any other supplier worldwide for servers, PCs, and other edge devices, and is also the leading merchant provider of eMMC and UFS embedded storage controllers used in smartphones, IoT products, and automotive applications.
Silicon Motion delivers customized, high-performance controller solutions for Enterprise SSDs, Edge SSDs, Embedded UFS & eMMC controllers, as well as Enterprise Boot Drives and Ferri solutions for automotive. Its controllers and storage solutions are designed to power the world’s most advanced AI Infrastructure, Edge AI, and Physical AI, combining high performance, low power, and proven reliability.
More News From Silicon Motion Technology Corporation
Silicon Motion (SIMO - Free Report) has been one of the most searched-for stocks on Zacks.com lately. So, you might want to look at some of the facts that could shape the stock's performance in the near term.
Shares of this chip company have returned +29.1% over the past month versus the Zacks S&P 500 composite's +6% change. The Zacks Computer - Integrated Systems industry, to which Silicon Motion belongs, has gained 60.3% over this period. Now the key question is: Where could the stock be headed in the near term?
While media releases or rumors about a substantial change in a company's business prospects usually make its stock 'trending' and lead to an immediate price change, there are always some fundamental facts that eventually dominate the buy-and-hold decision-making.
Revisions to Earnings EstimatesHere at Zacks, we prioritize appraising the change in the projection of a company's future earnings over anything else. That's because we believe the present value of its future stream of earnings is what determines the fair value for its stock.
We essentially look at how sell-side analysts covering the stock are revising their earnings estimates to reflect the impact of the latest business trends. And if earnings estimates go up for a company, the fair value for its stock goes up. A higher fair value than the current market price drives investors' interest in buying the stock, leading to its price moving higher. This is why empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.
For the current quarter, Silicon Motion is expected to post earnings of $1.98 per share, indicating a change of +187% from the year-ago quarter. The Zacks Consensus Estimate has changed +66.7% over the last 30 days.
The consensus earnings estimate of $8.37 for the current fiscal year indicates a year-over-year change of +135.8%. This estimate has changed +44.5% over the last 30 days.
For the next fiscal year, the consensus earnings estimate of $10.45 indicates a change of +24.8% from what Silicon Motion is expected to report a year ago. Over the past month, the estimate has changed +33.5%.
Having a strong externally audited track record, our proprietary stock rating tool, the Zacks Rank, offers a more conclusive picture of a stock's price direction in the near term, since it effectively harnesses the power of earnings estimate revisions. Due to the size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, Silicon Motion is rated Zacks Rank #1 (Strong Buy).
The chart below shows the evolution of the company's forward 12-month consensus EPS estimate:
12 Month EPS
Projected Revenue GrowthWhile earnings growth is arguably the most superior indicator of a company's financial health, nothing happens as such if a business isn't able to grow its revenues. After all, it's nearly impossible for a company to increase its earnings for an extended period without increasing its revenues. So, it's important to know a company's potential revenue growth.
In the case of Silicon Motion, the consensus sales estimate of $401.53 million for the current quarter points to a year-over-year change of +102.1%. The $1.56 billion and $1.84 billion estimates for the current and next fiscal years indicate changes of +76.3% and +17.5%, respectively.
Last Reported Results and Surprise HistorySilicon Motion reported revenues of $342.11 million in the last reported quarter, representing a year-over-year change of +105.5%. EPS of $1.58 for the same period compares with $0.6 a year ago.
Compared to the Zacks Consensus Estimate of $299.49 million, the reported revenues represent a surprise of +14.23%. The EPS surprise was +20.61%.
Over the last four quarters, Silicon Motion surpassed consensus EPS estimates three times. The company topped consensus revenue estimates each time over this period.
ValuationNo investment decision can be efficient without considering a stock's valuation. Whether a stock's current price rightly reflects the intrinsic value of the underlying business and the company's growth prospects is an essential determinant of its future price performance.
Comparing the current value of a company's valuation multiples, such as its price-to-earnings (P/E), price-to-sales (P/S), and price-to-cash flow (P/CF), to its own historical values helps ascertain whether its stock is fairly valued, overvalued, or undervalued, whereas comparing the company relative to its peers on these parameters gives a good sense of how reasonable its stock price is.
The Zacks Value Style Score (part of the Zacks Style Scores system), which pays close attention to both traditional and unconventional valuation metrics to grade stocks from A to F (an A is better than a B; a B is better than a C; and so on), is pretty helpful in identifying whether a stock is overvalued, rightly valued, or temporarily undervalued.
Silicon Motion is graded F on this front, indicating that it is trading at a premium to its peers. Click here to see the values of some of the valuation metrics that have driven this grade.
ConclusionThe facts discussed here and much other information on Zacks.com might help determine whether or not it's worthwhile paying attention to the market buzz about Silicon Motion. However, its Zacks Rank #1 does suggest that it may outperform the broader market in the near term.
Key Takeaways Top-ranked stocks ALB, ROAD, STRL, SIMO and MPC show strong earnings-beat potential ahead of results.Positive Earnings ESP, strong surprise history and favorable Zacks Rank boost odds of upside surprises.Consistent earnings outperformance can drive stock gains as investors reward results above expectations. It is not surprising that before an earnings season, every investor looks for stocks that can beat market expectations. This is because investors always try to position themselves ahead of time and look to tap stocks that are high-quality in nature.
We ran a screener that yielded stocks Albemarle (ALB - Free Report) , Construction Partners (ROAD - Free Report) , Sterling Infrastructure Inc. (STRL - Free Report) , Silicon Motion Technology (SIMO - Free Report) and Marathon Petroleum (MPC - Free Report) as the likely winners on the earnings beat potential.
Why Is a Positive Earnings Surprise So Important?Historically, stocks of companies with solid quarterly earnings (on a nominal basis) tank if they miss or merely meet market expectations. After all, a 20% earnings rise (though apparently looks good) doesn’t tell you if earnings growth has been exhibiting a decelerating trend.
Also, seasonal fluctuations come into play sometimes. If a company’s Q1 is seasonally weak and Q4 strong, then it is likely to report a sequential earnings decline. In such cases, growth rates are misleading when judging the true health of a company.
On the other hand, after much brainstorming and analysis of companies’ financials and initiatives, Wall Street analysts project the earnings of companies. They, in fact, club their insights and a company’s guidance when deriving an earnings estimate.
Thus, outperforming that estimate is almost equivalent to beating the company’s own expectation as well as the market perception. And if the margin of earnings surprise is big, it typically drives the stock higher right after the release. Thus, more than anything else, an earnings surprise can push a stock higher.
How to Find Stocks That Can Beat?Now, finding stocks that have the potential to beat on the bottom line may be investors’ dream, but not an easy job. One way to do this is to look at the earnings surprise history of the company.
An impressive track in this regard generally acts as a catalyst in sending a stock higher. It indicates the company’s ability to surpass estimates. And investors generally believe that the company will apply the same secret sauce to execute yet another earnings beat in its next release.
The Winning StrategyIn order to shortlist stocks that are likely to come up with an earnings surprise, we chose the following as our primary screening parameters.
Last EPS Surprise greater than or equal to 10%: Stocks delivering positive surprise in the last quarter tend to surprise again.
Average EPS Surprise in the last four quarters greater than 20%: We lifted the bar for outperformance slightly higher by setting the average earnings surprise for the last four quarters at 20%.
Average EPS Surprise in the last two quarters greater than 20%: This points to a more consistent surprise history and makes the case for another surprise even stronger.
In addition, we place a few other criteria that push up the chance of a positive surprise.
Zacks Rank less than or equal to 2: Only companies with a Zacks Rank #1 (Strong Buy) or 2 (Buy) rating can get through.
Earnings ESP greater than zero: A stock needs to have both a positive Earnings ESP and a Zacks Rank of #1, 2 or 3 for an earnings beat to happen, as per our proven model.
In order to zero in on those that have long-term growth potential and high trading liquidity, we have added the following parameters too:
Next 3–5 Years Estimated EPS Growth (Per Year) greater than 10%: Solid expected earnings growth exhibits the stock’s long-term growth prospects.
Average 20-day Volume greater than 100,000: High trading volume implies that the stocks have adequate liquidity.
A handful of criteria has narrowed down the universe from over 7,700 stocks to only 15.
Here are five out of 15 stocks:
Albemarle: The Zacks Rank #1 specialty chemicals company holds leading positions in attractive end markets globally. You can see the complete list of today’s Zacks #1 Rank stocks here.
The average earnings surprise of ALB for the past four quarters is 74.50%.
Construction Partners: This is an infrastructure and road construction company. It provides construction products and services to the public and private sectors. The stock has a Zacks Rank #2.
The average earnings surprise of ROAD for the past four quarters is 125.28%.
Sterling Infrastructure:The Zacks Rank #1 company operates through subsidiaries within segments specializing in E-Infrastructure, Building and Transportation Solutions principally in the United States, primarily across the Southern, Northeastern, Mid-Atlantic and the Rocky Mountain States, California and Hawaii.
The average earnings surprise of STRL for the past four quarters is 29.08%.
Silicon Motion Technology: Silicon Motion Technology Corporation is a leading developer of microcontroller ICs for NAND flash storage devices. The stock currently sports a Zacks Rank #1.
The average earnings surprise of SIMO for the past four quarters is 18.61%.
Marathon Petroleum: The company is a leading independent refiner, transporter and marketer of petroleum products.The stock currently has a Zacks Rank #1.
The average earnings surprise of MPC for the past four quarters is 49.50%.
On June 01, 2026, Silicon Motion Technology Corp SIMO shares fell 3.2% to a current price of $268.05. The stock has shown remarkable performance over the past year, with a staggering increase of 346.0%. However, it has also fluctuated significantly within the past 52 weeks, reaching a high of $294.99 and a low of $60.80.
GF Value™ verdict: Current price is $268.05 vs GF Value™ of $110.44, indicating shares are 142.7% overvalued.GF Score™ of 77/100 suggests the stock is above average in quality.Notable signal: Insiders sold $0.4M in shares over the last three months, indicating potential caution among company executives. Is SIMO Overvalued or Undervalued? Silicon Motion Technology Corp's current price of $268.05 contrasts sharply with its GF Value™ estimate of $110.44, indicating that the stock is significantly overvalued by 142.7%. This valuation places SIMO in a precarious position, suggesting that there may be limited upside for investors looking for price appreciation based on fundamental value. The GF Valuation label categorizes the stock as significantly overvalued, which indicates potential risks for investors considering entry at current levels.
GF Value™ is GuruFocus' proprietary measure of intrinsic value, calculated from historical trading multiples, past business growth, and future performance estimates. With the current price far exceeding the calculated fair value, the margin of safety for investors appears minimal. This raises concerns about the sustainability of the stock's recent price levels, especially given the current market volatility.
How Does SIMO's Valuation Compare to Its History? MetricCurrentHistorical P/E (TTM)53.3x22.1x (5-Year Median) Forward P/E30.8xN/A The current P/E ratio of 53.3x is substantially above its 5-year median of 22.1x, representing a 141% increase. Furthermore, the forward P/E of 30.8x suggests that even anticipated future earnings would still keep the stock in a premium valuation territory. This P/E analysis aligns with the GF Value™ verdict, reinforcing the conclusion that SIMO is overvalued relative to its historical valuation metrics.
What Does SIMO's GF Score™ Tell Us? MetricRating GF Score™77 Financial Strength10/10 Profitability8/10 Growth8/10 Valuation1/10 Momentum6/10 The GF Score™ of 77/100 indicates that Silicon Motion Technology Corp is above average in overall quality. The strongest areas are its Financial Strength, rated 10/10, and Profitability and Growth, both rated 8/10, suggesting a robust financial position and solid earnings potential. However, the Valuation rank of 1/10 signals significant concern regarding its current market price in relation to intrinsic value, indicating that the stock may not provide favorable returns at its present valuation.
What Are Insiders Doing with SIMO Stock? In the past three months, insiders have sold $0.4 million worth of shares, with no reported purchases. This selling activity may suggest a cautious outlook among company executives regarding the stock's future performance. Generally, insider selling can be perceived as a negative signal, as it may indicate a lack of confidence in the company’s current valuation or future growth prospects.
What This Means for Investors Based on the analysis of GF Value™, Silicon Motion Technology Corp is currently overvalued. The significant disparity between the current price and the GF Value™ estimate indicates potential risks for investors considering entry at this level.
For the complete analysis, visit the Silicon Motion Technology Corp SIMO stock page. You can also explore the GF Value™ page for detailed valuation methodology, or use the GuruFocus Stock Screener to find similar opportunities.
Frequently Asked Questions What is SIMO's GF Score™?
SIMO has a GF Score™ of 77/100, indicating that it is above average in quality based on key financial metrics.
Is SIMO overvalued or undervalued?
SIMO is currently overvalued, with shares trading at 142.7% above the GF Value™ estimate of $110.44.
What is SIMO's P/E ratio?
SIMO's current P/E (TTM) is 53.3x, which is significantly above its 5-year median of 22.1x, confirming its overvaluation status.
This stock alert was generated using automated technology and GuruFocus financial data to provide readers with timely and accurate market reporting. This content was reviewed by GuruFocus editorial team prior to publication. Please send any questions or comments about this story to [email protected].
Key Takeaways Silicon Motion introduced SM2524XT, a PCIe Gen5 DRAMless SSD controller for AI PCs.SIMO's SM2524XT hits up to 14 GB/s reads and 2.5M IOPS via PCIe Gen5 x4.Silicon Motion targets KV Cache loads with low latency plus SCA, FTL scheduling and LDPC ECC technology. Silicon Motion Technology Corporation (SIMO - Free Report) has introduced the SM2524XT, an advanced PCIe Gen5 DRAMless SSD controller built specifically for artificial intelligence (AI) PCs and AI inference workloads. The new solution reportedly delivers faster data access, lower latency and improved efficiency, supporting the growing performance requirements of next-generation AI applications.
Silicon Motion’s SM2524XT uses a new four-processor-core architecture, PCIe Gen5 x4 connectivity and high-speed NAND interfaces to deliver read speeds of up to 14 GB/s and random performance of up to 2.5 million IOPS. It is built on TSMC's 6nm process technology, offering up to 25% better performance per watt and up to 25% higher random performance than the previous generation, making it well-suited for demanding AI workloads.
The SSD controller addresses the rising storage demands of AI PCs through its high random I/O performance and low-latency capabilities. These features help efficiently handle KV Cache workloads, which generate large volumes of random data access and can create performance hurdles for traditional SSDs. The solution also incorporates technologies such as Separated Command Address, advanced Flash Translation Layer scheduling, and NANDXtend LDPC ECC to enhance reliability and ensure stable operation under demanding conditions.
As AI adoption continues to grow across consumer and enterprise devices, this latest product is likely to strengthen Silicon Motion's position in the rapidly expanding market for high-performance storage solutions for AI computing.
How Are Competitors Advancing in the Storage Market?Silicon Motion faces competition from Seagate Technology Holdings plc (STX - Free Report) and Micron Technology, Inc. (MU - Free Report) . Seagate continues to expand its SSD portfolio to meet growing storage demand from enterprise and AI applications. The company offers enterprise SSDs for high-performance data center workloads. Seagate launched the LaCie Rugged SSD4, a portable SSD that delivers fast data transfer speeds for professional users.
Micron continues to expand its SSD portfolio to support growing demand from AI, cloud and data center customers. The company has introduced SSDs with higher performance and storage capacity to meet increasing data processing needs. These products help strengthen Micron's position in the growing storage market.
SIMO’s Price Performance, Valuation and EstimatesSilicon Motion shares have skyrocketed 312.4% over the past year compared with the industry’s growth of 278.1%.
Image Source: Zacks Investment Research
Going by the price/earnings ratio, the company's shares currently trade at 29.01 forward earnings, higher than 19.49 for the industry.
Image Source: Zacks Investment Research
Earnings estimates for 2026 have increased 44.6% to $8.37 over the past 60 days, while those for 2027 have also increased 33.5% to $10.45.
Image Source: Zacks Investment Research
Silicon Motion stock currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Key Takeaways SIMO is gaining share in NAND controllers, with mass production of PCIe NVMe client SSD chips.SIMO rolled out PCIe Gen5 SM2508 on TSMC 6nm, targeting lower power and better efficiency.SIMO targets AI PCs, smartphones and automotive storage; 2026 EPS estimate rose to $8.37. Silicon Motion Technology Corporation (SIMO - Free Report) has emerged as one of the strongest beneficiaries of secular growth trends across the NAND flash storage market. The company continues to expand organically through market-share gains, new product launches and increasing exposure to high-growth end markets such as AI PCs, smartphones, automotive storage and enterprise data centers.
The company is a leading merchant supplier of client SSD (solid state drive) controllers to module makers, including most market leaders in the United States, Taiwan and China. Silicon Motion believes that it is well-equipped to adapt to industry changes with healthy collaborations with flash vendors for developing proprietary controller technology to overcome the existing weakness of 3D NAND and outshine peers. The company has commenced initial sales of 3D SSD controllers to flash partners. It expects this controller to be a significant driver of SSD controller growth over the next year, as NAND Flash partners’ 3D capacity expands.
SIMO Buoyed by Portfolio StrengthThe company has commenced mass production of PCIe NVMe client SSD controllers for flash partners. Accelerated product sales, along with favorable industry trends, portray bright prospects for Silicon Motion. The company has rolled out the world's first PCIe Gen5 client SSD controller, SM2508, leveraging TSMC's 6nm EUV process. This cutting-edge controller is capable of achieving 50% lower power consumption compared to 12nm counterparts, offering up to 1.7x better power efficiency than PCIe Gen4 SSDs.
Silicon Motion has expanded its SSD controller program engagements with PC OEMs and eMMC/UFS controllers for smartphones, automotive applications and IoT/smart devices. The company is adding to this momentum with the upcoming launch of its next-generation enterprise-class SSD controllers. Silicon Motion’s eMMC is showing strong signals of rebound, thereby adding to the strength of its overall embedded storage market that comprises both SSD controllers and eMMC embedded memory. As market trends suggest the balance is tilting from transitioning of eMMC 4.5 toward that of eMMC 5.0, the company foresees lucrative prospects for eMMC 5.1 controller sales.
SIMO’s Key Growth DriversSilicon Motion operates a fabless business model, focusing on chip design while outsourcing manufacturing to foundries like TSMC. Consequently, the company has a low capital investment requirement as it does not require expensive fabrication plants, enabling it to adopt advanced manufacturing nodes quickly, leading to higher margins compared to integrated manufacturers. This enables the company to focus on innovation and product development rather than manufacturing complexity.
The key growth drivers for SIMO include AI and high-performance computing, cloud data centers, automotive storage, smartphones and mobile devices. Each of these end markets is growing fast and offers lucrative growth potential. We believe an expanding customer base and innovative products will act as tailwinds for the company’s top-line growth, going forward. Over the past 10 years, Silicon Motion has shipped more than 5 billion controllers cumulatively – more than any other company in the world. Silicon Motion ships more than 750 million NAND controllers on average every year.
Image Source: Zacks Investment Research
Price PerformanceThe stock has gained a stellar 231% over the past six months compared with the industry’s growth of 139%. It has also outperformed peers like Advanced Micro Devices, Inc. (AMD - Free Report) and International Business Machines Corporation (IBM - Free Report) . Advanced Micro has gained 141.5% and IBM is up 6.9% over this period.
Six-Month Price Performance of SIMO
Image Source: Zacks Investment Research
Estimate Revision TrendEarnings estimates for Silicon Motion for 2026 have moved up 83.6% to $8.37 over the past year, while the same for 2027 has increased 97.2% to $10.45. The positive estimate revision depicts optimism about the stock’s growth potential.
Image Source: Zacks Investment Research
End NoteWith solid fundamentals and healthy revenue-generating potential, driven by robust demand trends, Silicon Motion appears to be a solid investment proposition. Further, a strong emphasis on quality, diligent execution of operational plans and continuous portfolio enhancements are driving more value for customers. An asset-light fabless semiconductor model, solid growth exposure to AI, cloud and automotive markets, with increasing market share in SSD and mobile controllers and continuous innovation in storage technologies are key growth drivers for the company.
The stock has a long-term earnings growth expectation of 53.6% and delivered a trailing four-quarter average earnings surprise of 18.6%. Silicon Motion sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Riding on a robust earnings surprise history and favorable Zacks Rank, Silicon Motion appears primed for further stock price appreciation. Consequently, investors are likely to profit if they bet on this high-flying stock now.
Key Takeaways SIMO is favored now, beating peers on 2026 growth outlook, past-year gains and a slightly lower P/S.SIMO's 2026 consensus: sales 76.3%, EPS 135.8%; EPS estimates 44.6% in 60 days.QCOM's 2026 consensus: sales -2.8%, EPS -10.3%; EPS estimates down 2.3% in 60 days. Qualcomm Incorporated (QCOM - Free Report) and Silicon Motion Technology Corporation (SIMO - Free Report) are leading semiconductor firms with exposure to key growth markets such as smartphones, automotive electronics, AI-enabled devices and data storage. Qualcomm offers high-performance, low-power chip designs for mobile devices, PCs, XR (Extended Reality), automotive, wearables, robotics, connectivity and AI use cases. Its brands include Snapdragon systems-on-chip, FastConnect Wi-Fi and Bluetooth systems and Qualcomm-branded 4G, 5G and IoT equipment. The company is currently pursuing the integration of on-device generative AI into all of its product lines.
Silicon Motion is a leading developer of microcontroller ICs for NAND flash storage devices. The semiconductor company also designs, develops and markets high-performance, low-power semiconductor solutions for original equipment manufacturers (OEMs) and other customers.
Let us delve a little deeper into the companies’ competitive dynamics to understand which of the two is relatively better placed in the industry.
The Case for QCOMQualcomm is well-positioned to meet its long-term revenue targets driven by solid 5G traction, greater visibility and a diversified revenue stream. The company is strengthening its foothold in the mobile chipsets market with innovative product launches. Leveraging processors with multi-core CPUs with cutting-edge features, amazing graphics and worldwide network connectivity, Qualcomm Snapdragon mobile platforms are fast with superb power efficiency. Smartphones and mobile devices built with Snapdragon mobile platforms enable immersive augmented reality and virtual reality experiences, brilliant camera capabilities, superior 4G LTE and 5G connectivity with state-of-the-art security solutions. It is currently foraying deeper into the realm of AI capabilities within the laptop and desktop business with the launch of the Snapdragon X chip for mid-range AI desktops and laptops.
The company is increasingly focusing on the seamless transition from a wireless communications firm for the mobile industry to a connected processor company for the intelligent edge. Qualcomm is witnessing healthy traction in EDGE networking, which helps transform connectivity in cars, business enterprises, homes, smart factories, next-generation PCs, wearables and tablets. The company is gaining traction in the vehicle-to-everything (V2X) communication systems market with the buyout of Autotalks. With seamless access to Autotalks’ comprehensive V2X expertise, Qualcomm has been able to offer an extensive suite of automotive-qualified global V2X solutions for installation in vehicles, as well as 2-wheelers and roadside infrastructure.
Despite efforts to ramp up its AI initiatives, Qualcomm has been facing tough competition from Intel in the AI PC market. Qualcomm is expected to face softness in demand in the near term. OEMs based in the communist nation are largely pulling back on new 4G device orders and managing their inventory in advance for the transition to 5G. Consequently, Qualcomm expects an adverse impact on device shipments as sell-in and sell-through growth rates realign and channel inventory levels are drawn down. Qualcomm’s extensive operations in China are further likely to be significantly affected by the U.S.-China trade hostilities.
The Case for SIMOSilicon Motion has established itself as the leading merchant supplier of client SSD (solid state drive) controllers to module makers, including most market leaders in the United States, Taiwan and China. The company believes that it is well-equipped to adapt to industry changes as it has collaborated with flash vendors for developing proprietary controller technology to overcome the existing weakness of 3D NAND and outshine peers. Silicon Motion has commenced initial sales of 3D SSD controllers to flash partners. It expects this controller to be a significant SSD controller growth driver for the next year, as NAND Flash partners’ 3D capacity expands.
Silicon Motion operates a fabless business model, focusing on chip design while outsourcing manufacturing to foundries like TSMC. Consequently, the company has a low capital investment requirement as it does not require expensive fabrication plants, enabling it to adopt advanced manufacturing nodes quickly, leading to higher margins compared to integrated manufacturers. This, in turn, enables the company to focus on innovation and product development rather than manufacturing complexity. The key growth drivers for SIMO include AI and high-performance computing, cloud data centers, automotive storage, smartphones and mobile devices. Each of these end markets is growing fast and offers lucrative growth potential. Over the past 10 years, the company has shipped more than 5 billion controllers cumulatively, more than any other company in the world. Silicon Motion ships more than 750 million NAND controllers on average every year.
However, sluggishness in the global economy is likely to weigh on the company’s wireless and broader semiconductor market. The demand for PCs and smartphones in the end market continues to be soft as numerous suppliers are focusing on reducing their inventory levels. The near-term price fluctuation in the PC market remains a concern. Silicon Motion continues to acquire a large number of companies. While this improves revenue opportunities, business mix and profitability, it adds to integration risks. Moreover, the semiconductor industry is highly dynamic as it is prone to swift technological changes, stiff competition from evolving industry standards and declining average selling prices.
How Do Zacks Estimates Compare for QCOM & SIMO?The Zacks Consensus Estimate for Qualcomm’s fiscal 2026 sales indicates a year-over-year decline of 2.8%, while that for EPS suggests a decrease of 10.3%. The EPS estimates have been trending southward (down 2.3%) over the past 60 days.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for Silicon Motion’s 2026 sales indicates a year-over-year rise of 76.3%, while that for EPS suggests growth of 135.8%. The EPS estimates have been trending northward (up 44.6%) over the past 60 days.
Image Source: Zacks Investment Research
Price Performance & Valuation of QCOM & ASTSOver the past year, Qualcomm has gained 38.9% compared with the industry’s growth of 91.8%. SIMO has surged 284.4% over the same period.
Image Source: Zacks Investment Research
Silicon Motion looks slightly more attractive than Qualcomm from a valuation standpoint. Going by the price/sales ratio, Qualcomm’s shares currently trade at 5.27 forward sales, higher than SIMO’s 5.22.
Image Source: Zacks Investment Research
QCOM or SIMO: Which is a Better Pick?Qualcomm currently carries a Zacks Rank #4 (Sell).
Silicon Motion sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
While Silicon Motion expects sales and earnings to improve in 2026, Qualcomm expects both metrics to decline. In terms of price performance, Silicon Motion has outperformed Qualcomm and is trading cheaply compared to the latter. With a superior Zacks Rank and favorable metrics, Silicon Motion seems to hold a competitive edge over Qualcomm and is therefore a better investment option at the moment.
Shift4’s Explosive Growth Comes With High-Stakes RiskFiserv NASDAQ: FISV executives used the company’s 2026 Investor Day to outline a medium-term plan aimed at restoring what CEO Mike Lyons described as Fiserv’s historical identity as a “constant compounder,” while acknowledging recent service, product delivery and client retention challenges.
Lyons said the company completed a comprehensive review last fall that identified “real issues” in client service, product delivery, technology resilience and capital allocation, but also confirmed that “the underlying strength of our franchise was intact.” The company’s response is the “One Fiserv” action plan, which Lyons said is anchored in five pillars: client focus, Clover growth, product delivery and innovation, AI-driven transformation through Project Elevate, and disciplined capital allocation.
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The Quiet Infrastructure Play on Small-Bank SurvivalLyons said Fiserv is tracking to its financial expectations and expects the current quarter to mark “the trough in revenue growth,” with revenue growth accelerating into the mid-single digits over the plan period. He said the company continues to benefit from its role as “intelligent technology infrastructure” for financial institutions and merchants, processing nearly 1 billion transactions per day for clients.
Medium-Term Targets Emphasize Revenue Growth, Margins and Cash Flow CFO Paul Todd said Fiserv reaffirmed its full-year 2026 guidance, calling the year a transition period. He said the company expects adjusted revenue to decline in the low single digits in the first half of 2026, followed by 6% to 8% year-over-year growth in the second half, supporting full-year adjusted revenue growth of 1% to 3%.
3 Different Fintech Giants: Turnaround, Stability, or Risky Bet?For the 2026 through 2029 period, Todd laid out a financial framework that includes:
Compounded adjusted revenue growth of 4% to 6% from a 2026 base. Adjusted operating margin above 37% by 2029. More than $13.5 billion of free cash flow from 2027 through 2029. Adjusted earnings per share of more than $12 in 2029. Free cash flow conversion of approximately 90% of adjusted net income. Todd said baseline operating leverage should contribute roughly 150 basis points of adjusted operating margin expansion over three years, while Project Elevate is expected to add more than 200 basis points by 2029 through net cost reductions of $500 million. He said Fiserv expects to use the majority of excess cash for share repurchases while reducing gross leverage toward the low end of its 2.5 times to 3 times target range.
Clover Remains Central to Merchant Growth Plan Takis Georgakopoulos, co-president responsible for Merchant Solutions, said the merchant business processed $4.6 trillion of transactions in 2025 and supports 3.9 million small businesses, including 900,000 Clover merchants. He said Fiserv has been consolidating its merchant infrastructure around Commerce Hub, a cloud-native platform that is live with $200 billion in gross payment volume across 40 markets.
Georgakopoulos said Clover generated $3.3 billion in 2025 revenue across Fiserv’s SMB, processing and enterprise segments. He described the company’s goal as making Clover “the true operating system for small businesses,” supported by hardware updates, vertical software, horizontal value-added services, international expansion and efforts to convert non-Clover SMB clients.
Fiserv expects Clover gross payment volume growth to rise above 10% and reach the upper end of a 10% to 15% medium-term range, Georgakopoulos said. Clover revenue is expected to grow 15% to 20% annually, helped by value-added services, Clover Capital, Clover Savings and conversion of non-Clover clients. Merchant Solutions overall is expected to grow 6% to 8% over the medium term, with enterprise in the mid-single digits and processing roughly flat.
Georgakopoulos also highlighted AI adoption inside the merchant organization, saying 40% of engineers use AI daily and 25% of code is written by AI, with a goal of moving both figures close to 100% by year-end. He said AI is helping Fiserv modernize services, improve speed to market and build products tied to agentic commerce.
Financial Solutions Focuses on Stabilization and Modernization Dhivya Suryadevara, co-president responsible for Financial Solutions, said the segment serves more than 6,000 clients globally across banking, digital payments and issuing. She said the banking business has faced “service and delivery issues,” adding, “We have a service problem, not a technology problem, and it’s very much solvable.”
Suryadevara said Fiserv has committed to no forced core migrations and is moving toward modular, core-agnostic capabilities that clients can adopt on their own timelines. Banking delivers $2.4 billion in revenue and serves more than 3,500 financial institutions, according to Suryadevara, who said Fiserv is number one in U.S. core and digital banking.
In digital payments, Suryadevara said Fiserv generated nearly $4 billion in 2025 revenue and supports payment platforms, consumer payment rails and value-added services. She said 41 of the top 50 U.S. banks use Fiserv’s consumer payment solutions. In issuing, she said the company generated more than $3.3 billion in 2025 revenue and serves 25 of the top 50 U.S. credit issuers and 80% of U.S. private-label issuers.
Financial Solutions is expected to grow adjusted revenue at a 2% to 4% medium-term compound annual rate, Suryadevara said, with banking at or slightly below the low end of the range and payments and issuing toward the higher end.
AI, Embedded Finance and Stablecoin Highlighted as New Growth Areas Executives repeatedly pointed to AI as both a cost-efficiency tool and a product opportunity. Lyons said Fiserv announced a strategic collaboration with OpenAI and is using AI to improve authorization rates, fraud prevention, service, testing and product delivery.
Suryadevara introduced agentOS, a platform in beta that allows financial institutions to deploy AI agents across systems of record with banking-grade controls. She said early pilots include commercial loan onboarding with First Interstate Bank and reporting automation with Boulder Dam Credit Union.
Fiserv also highlighted opportunities at the intersection of Merchant Solutions and Financial Solutions, including embedded finance, a two-sided liquidity network, on-us transactions and data products. Georgakopoulos said Fiserv’s bank- and merchant-friendly stablecoin, FYUSD, is expected to go live this summer and will support use cases such as real-time settlement, cross-border remittances, B2B payouts and programmable money.
As part of its capital allocation review, Fiserv announced plans to sell a majority stake in its ATM servicing and related businesses to Bridgepoint Group for approximately $300 million in after-tax proceeds, while retaining a 49% equity stake in a new joint venture. Todd said the business has an annual revenue run rate of about $200 million, with a flat revenue trajectory and margins similar to Fiserv overall.
About Fiserv NASDAQ: FISVFiserv, Inc, founded in 1984 and headquartered in Brookfield, Wisconsin, is a global provider of financial services technology. The company develops and delivers integrated solutions for payments, processing, risk and compliance, customer and channel management, and business insights and optimization. Serving thousands of clients, Fiserv supports banks, credit unions, securities broker-dealers, leasing and finance companies, and retailers.
Fiserv’s core offerings include account processing systems that automate deposit, lending and transaction processing for financial institutions, as well as digital banking platforms that enable mobile and online banking services.
This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected].
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For years, merchant services centered on moving money from cardholder to business. The current earnings season gives proof that business has become far broader, encompassing everything from payments to back-office efficiency.
Across quarterly updates from Block, PayPal, Shopify and Fiserv, executives described merchants grappling with rising operating complexity, fragmented sales channels and pressure to keep customers engaged while managing costs.
The common thread running through the results was that many businesses still want direct relationships and operational support, even as commerce becomes automated and software-driven. The growth revolves around who can become embedded in a merchant’s daily operations.
Small and mid-sized businesses, particularly those managing both physical and digital storefronts, often lack the internal technology resources to stitch together payments, marketing, payroll and financing systems on their own.
Fiserv, for example, used its first-quarter results to emphasize what executives described as a broader operating platform strategy with Clover as a key anchor. Clover gross payment volume rose 12% excluding gateway conversion impacts. Executives also pointed to healthcare and professional services initiatives, along with efforts tied to AI-powered merchant development tools.
During the earnings call, CEO Mike Lyons said businesses want providers that can combine payments, software and workflow management rather than offering isolated products. He also told analysts that Fiserv was “expanding Clover into other verticals such as healthcare and professional services” while deepening capabilities around payroll, accounts payable and software tools for merchants.
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PayPal’s results showed a similar effort to broaden merchant relationships beyond checkout. The company reorganized its business into three segments, including a division focused specifically on payment processing and value-added services.
Executives described merchants as seeking integrated tools that can improve conversion rates, deepen customer relationships and simplify increasingly global commerce operations. PayPal said payment services provider volume growth accelerated to 11%, while enterprise payment volume increased in the mid-teens. The company also pointed to demand for buy now, pay later options and digital wallet adoption among consumers.
Moving Further Into Operations The earnings reports also highlighted a broader change underway in merchant services: Providers are attempting to become operating systems for commerce rather than utilities sitting behind transactions.
Shopify’s quarter illustrated how deeply software, payments and merchant management have become intertwined.
President Harley Finkelstein framed the company’s role as helping merchants manage growing complexity across commerce channels. Executives also repeatedly discussed AI tools designed to assist merchants with automation, marketing and operational management. Shopify said merchants built more than 12,000 custom applications using Sidekick during the quarter.
Block CEO Jack Dorsey described a strategy in which AI tools move from passive assistants to systems that actively help merchants identify operational issues before they worsen. The company’s Managerbot product, aimed at sellers, is designed to identify issues such as rising food costs or staffing inefficiencies.
That dynamic has encouraged providers to bundle more services together.
Fiserv highlighted Clover Capital as one of the growth drivers inside its merchant business.
Shopify’s filings showed the degree to which merchant financing has become embedded in platform economics. The company reported loans and merchant cash advances of $2.1 billion on its balance sheet at the end of the quarter, up from $1.8 billion at year-end 2025. That increase reflected continued expansion of Shopify Capital as merchants seek working capital tied directly to sales activity flowing through the platform.
Executives made clear that lending is becoming part of a broader merchant-retention strategy. Shopify’s Finkelstein said on the earnings call that the company wants to “absorb more of that complexity into our systems and become more valuable to merchants.” In practice, that often includes financing, payments, logistics and operational software delivered through one ecosystem.
Block provided further evidence that merchant lending remains a key offering. In its 10-Q filing, commercial lending tied to Square sellers remains a substantial balance-sheet business. Commercial loans held for investment totaled $456.9 million at the end of the quarter.
Taken together, the earnings reports suggested that merchant lending is no longer being treated as a standalone business line. Providers view credit as part of the broader infrastructure tying merchants to their ecosystems. The more deeply financing becomes embedded into payments flows, payroll management, customer analytics and software operations, the more difficult it becomes for merchants to separate one provider from another.
Ecosystems Become Retention Tools The earnings reports also suggested that merchant ecosystems are becoming central to customer retention strategies.
Rather than scaling transaction by transaction, providers increasingly want merchants operating within closed loops of software, financial products and customer engagement tools. The deeper the integration, the harder it becomes for businesses to leave.
Block’s Neighborhoods initiative illustrated this strategy particularly clearly. The company said sellers representing $320 million in annualized gross payment volume had joined the loyalty and rewards platform by March. The service ties Square sellers directly to Cash App consumers through rewards and local promotions.
PayPal similarly pointed to its “two-sided network” strategy connecting merchants and consumers across checkout, wallets and payment services. Shopify stressed that merchants are relying on the company not just for storefront creation but for logistics, analytics, customer acquisition and operational management.
The broader message is this: Merchant services firms are trying to cement loyalty by becoming indispensable to daily business operations. Payments remain the foundation, but the surrounding services increasingly determine the ecosystem’s expansion.
Global payments and financial services technology provider Fiserv is spinning off its cash-handling operations into a newly formed joint venture with specialist private equity firm Bridgeport Partners.
The transaction will specifically encompass Fiserv’s ATM Managed Services, Cash & Logistics and MoneyPass business lines, according to a Wednesday (May 13) press release. Under the terms of the agreement, which remains subject to customary closing conditions and regulatory approvals, Bridgeport Partners is slated to take over operational control and direct the day-to-day management of these divisions upon closing.
The maneuver aims to pair Fiserv’s client relationships and foundational industry technology with Bridgeport’s track record of scaling financial technology and payments-adjacent platforms, the release said. Bridgeport’s principals bring more than four decades of experience in the banking and payments sector, focusing heavily on “operational excellence” and product innovation within established financial markets.
Moving forward, the two companies will establish a formal governance structure to align on client outcomes and long-term value creation, according to the release. The targeted businesses will remain fully under Fiserv’s operational umbrella until the deal is finalized.
“Fiserv has built strong, durable businesses serving financial institutions, merchants and consumers across the ATM and cash ecosystem,” Fiserv CEo Mike Lyons said in the release. “This agreement reflects our One Fiserv approach, delivering positive client experiences, aligning each business with the operating model and investment best suited to drive growth and client outcomes.”
The move to offload day-to-day management of its ATM and cash logistics divisions follows a challenging financial quarter for Fiserv, which is framing 2026 as a necessary transition period. The payments processor disclosed during an earnings report May 5 that adjusted revenue for the first quarter decreased 2.4% year over year to $4.68 billion, while organic revenue fell by 4%. The company’s financial solutions segment experienced a 6% decline during the quarter.
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During an accompanying earnings call, Lyons pointed to “higher-than-normal” attrition within the core banking segment as a primary hurdle, attributing the client departures to historical customer service issues that the company is working to address.
To stabilize the business and execute its internal One Fiserv strategic plan, the company has recruited external senior executives and is aggressively deploying artificial intelligence to mitigate its banking segment attrition, a strategy that has already reduced the resolution time for client inquiries by 27% compared to the prior year.
By transferring the operational burden of its legacy ATM and cash divisions to Bridgeport Partners, Fiserv seeks to reshape its portfolio to focus resources on resolving its core banking vulnerabilities and expanding high-growth products like its Clover point-of-sale platform.
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MILWAUKEE, May 19, 2026 (GLOBE NEWSWIRE) -- Fiserv, Inc. (NASDAQ: FISV), a leading global provider of payments and financial services technology solutions, announced its participation in an upcoming investor conference in June.
Paul Todd, Chief Financial Officer, will represent Fiserv at the RW Baird 2026 Global Consumer, Technology and Services Conference at 3:45 p.m. ET on June 2, 2026.
A live webcast and replay of the presentation will be available on the Investor Relations section of the Fiserv website at investors.fiserv.com.
About Fiserv
Fiserv, Inc. (NASDAQ: FISV), a Fortune 500 company, moves more than money. As a global leader in payments and financial technology, the company helps clients achieve best-in-class results through a commitment to innovation and excellence in areas including account processing and digital banking solutions; card issuer processing and network services; payments; e-commerce; merchant acquiring and processing; and Clover®, the world’s smartest point-of-sale system and business management platform. Fiserv is a member of the S&P 500® Index and one of TIME Magazine’s Most Influential Companies™. Visit fiserv.com and follow on social media for more information and the latest company news.
For more information contact:
Media Relations:
Investor Relations:Stacy DavidsonWalter PritchardChief Communications and Marketing OfficerSenior Vice President, Investor RelationsFiserv, Inc.Fiserv, [email protected]@fiserv.com
Key Takeaways Square is expanding in the restaurant and mid-market segments with POS and commerce tools for sellers.The Hat chose Square's unified commerce platform to support operations across 11 locations and expansion.Square's first-quarter 2026 gross profit rose 9% as payment volume grew 13% amid restaurant momentum. Block’s (XYZ - Free Report) Square is strengthening its presence in the restaurant and mid-market segments through point-of-sale and commerce solutions that help sellers accept payments, manage operations and improve customer engagement. New restaurant-focused offerings, including the early-access Square for Drive-Thru solution, are helping the company gain traction in higher-throughput food and beverage businesses.
A key example is Square’s partnership with The Hat, the restaurant chain known for its pastrami sandwiches. The Hat selected Square as a unified commerce platform to support operations across its 11 locations as it expands beyond California. The company needed real-time operational visibility, standardized workflows and seamless coordination across its restaurant portfolio.
Square for Restaurants addresses these requirements through centralized menu management and unified reporting, enabling leadership to monitor performance across locations and improve operational efficiency. The Hat also uses Square Register, paired with receipt printers and cash drawers, to support high-volume counter service, while Square Marketing helps strengthen customer engagement and loyalty as the brand enters new markets.
Square is seeing similar adoption from other restaurant brands, including Black Seed Bagels, which recently implemented Square’s unified commerce platform across its New York City locations. These product additions and customer wins are contributing to stronger business performance. In first-quarter 2026, Square’s gross profit rose 9% year over year to $982 million, while gross payment volume increased 13% to $61.2 billion, reflecting strong momentum in food and beverage, mid-market and international markets.
How Are Square’s Competitors Fairing?Toast (TOST - Free Report) added two notable enterprise wins: Hungry Howie’s selected Toast for a rollout across roughly 500 locations, using its restaurant technology suite for complex pizza operations, and The Alinea Group chose Toast as its preferred platform across Michelin-starred restaurants and bars, including Alinea, Next, The Aviary and The Office.
Fiserv’s (FISV - Free Report) Clover recently expanded its restaurant offerings with Clover Reserve powered by Tabit, an enterprise-grade POS and hospitality solution for full-service and fine-dining restaurants. The platform adds advanced floor management, tableside service and unified payments, strengthening Clover’s push into complex restaurant operations, similar to Square’s restaurant-focused expansion.
XYZ’s Price Performance, Valuation & EstimatesShares of Block have risen 20.6% over the past year, outperforming the broader industry but underperforming the S&P 500 Index.
Image Source: Zacks Investment Research
In terms of forward 12-month P/E, XYZ stock is trading at 16.55X, which is at a discount to the Zacks Internet Software industry’s 26.48X.
Image Source: Zacks Investment Research
Block’s estimate revisions reflect a positive trend. The Zacks Consensus Estimate for full-year 2026 EPS has been revised northward 1.1% over the past month. It indicates a significant increase year over year.
Image Source: Zacks Investment Research
Block currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Block’s Pivot to Profits and AI Is Turning HeadsFiserv NASDAQ: FISV Chief Executive Officer Mike Lyons said the payments and financial technology company is focused on returning to a “constant compounder” profile by sharpening its business mix, improving execution and investing around two major markets: banking and commerce.
Speaking with J.P. Morgan Managing Director and Senior Analyst Tien-Tsin Huang at the firm’s conference, Lyons said Fiserv benefits from providing “mission-critical services” to large markets undergoing structural change, including digital payments, embedded finance, real-time money movement and AI-enabled services.
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Shift4’s Explosive Growth Comes With High-Stakes RiskLyons said the company’s financial model is supported by highly recurring revenue, positive operating leverage, strong free cash flow conversion and a capital allocation approach that remains centered on share repurchases while staying within a 2.5x to 3x leverage range.
He also pointed to recent portfolio actions as examples of Fiserv’s effort to sharpen capital intensity. The company discussed an ATM joint venture with Bridgeport at its Investor Day and sold its education business, a student loan processing operation, which Lyons described as a good business but not strategic to Fiserv’s broader direction.
Fiserv Reaffirms Outlook, Expects Second-Half Acceleration The Quiet Infrastructure Play on Small-Bank SurvivalLyons said the company’s current-year guidance was maintained and acknowledged that it implies faster growth in the second half. He said Fiserv was down “a little” in the first quarter and expected the second quarter to be slightly worse, resulting in a first half down low single digits.
He outlined three drivers of expected second-half improvement: signed contracts coming online, planned activity ramps from existing enterprise clients and product ramps across Clover Capital, Clover Savings, Clover international, XD and CashFlow Central.
Lyons said those factors support a second-half growth range of 6% to 8% and a full-year range of 1% to 3%. He added that excluding approximately two points from new client contract ramps, the second-half rate aligns with the company’s 4% to 6% forward plan.
On the macro environment, Lyons said banks remain in good shape, with sound credit and a focus on improving technology capabilities. On the consumer side, he described the environment as “cautiously optimistic,” noting that consumers are employed and still spending, though Fiserv’s Small Business Index showed spending shifting toward fuel while some discretionary categories declined year over year. Clover data for April remained consistent with the first quarter, with growth of 12% excluding the gateway, he said.
Financial Segment Focuses on Service, Attrition and Product Delivery Lyons said Fiserv’s financial services segment is expected to grow 2% to 4%, with banking at the lower end and issuing and payments at the higher end. He said customer service concerns have been concentrated in the banking segment and centered on three issues: day-to-day service, delayed product delivery and the prior decision to reduce the number of cores from 16 to five.
Fiserv has rebuilt its day-to-day service approach, added resources and re-engaged the consultant community, Lyons said. He also cited the acquisition of Smith Consulting as part of an effort to provide more value-added services to clients.
On product delivery, Lyons said Fiserv has hit every major milestone since its Forum event in September. XD and CashFlow Central are in implementation mode, core enhancements are being completed and Core Advanced remains on time, he said.
Lyons also said Fiserv has stopped forced conversions and is now emphasizing a “journey approach” to core conversions, using a more modular strategy to help clients modernize over time.
Gross attrition in the financial services business has roughly doubled, creating a 75 to 100 basis point headwind, Lyons said. He said Fiserv expects attrition to return to more normalized levels by the end of its medium-term plan in 2029, supported by better service, product delivery and offerings such as StoneCastle, agentOS and data center modernization.
Clover Growth Plan Includes Value-Added Services and International Expansion Lyons said Clover’s 10% to 15% gross payment volume growth framework is built around a 10% organic growth base, with the potential to reach 15% if Fiserv succeeds in converting non-Clover customers to Clover or adding Clover value-added services to those customers.
He said Clover has consistently grown in the 8% to 12% range in recent years and identified several drivers to sustain growth, including horizontal and vertical value-added services, healthcare through PracticePay, professional services, restaurant offerings, international expansion and distribution through ISOs, ISVs, banks and a direct sales force.
Lyons said international markets now account for more than 20% of Clover volume, with Japan expected to come online later this year and into 2027. He also said the company sees room to improve customer retention and the back-end experience.
For non-Clover merchant customers, Lyons said the business has been stable for a long time. He said those customers are generally satisfied Fiserv clients, and the company will take a targeted approach to offering services such as Clover Savings and Clover Capital without forcing major hardware or platform changes.
Merchant Platform, STAR and Business Synergies Lyons said Fiserv is building a unified gateway across enterprise clients, platform clients and Clover. Commerce Hub is live with $200 billion in volume across 40 countries, he said. He also highlighted Fiserv’s enterprise point-of-sale position, Finxact ledger capabilities, backend processing scale and data assets as advantages in competing across e-commerce and omnichannel payments.
Asked about STAR, Lyons described Fiserv’s debit networks, STAR and Accel, as a strong example of synergy between the merchant and financial services businesses. He said the combined networks represent the third-largest player and allow Fiserv to serve issuers while also routing transactions through its acquiring capabilities.
Lyons said STAR has “strategic optionality,” including potential relevance for on-us settlement, global opportunities and future payments use cases tied to demand deposit accounts and merchants.
Lyons also defended keeping Fiserv’s merchant and financial services businesses together following a strategic review. He cited existing synergies in bank distribution of Clover, acquiring networks, biller products and fraud data, as well as future opportunities in stablecoin, embedded finance and on-us settlement.
AI Push Centers on Agent OS Lyons said Fiserv has received strong feedback on agentOS, which he described as an operating system for banks. He said banks want to use AI but face challenges because they operate in highly regulated environments involving compliant and personally identifiable information.
He said agentOS is intended to bridge the needs of banks and AI providers by allowing agents to be deployed in a safer, more controlled way. Lyons said Fiserv sees potential for agentOS to create value for customers and open addressable markets that previously were not on the company’s radar.
About Fiserv NASDAQ: FISVFiserv, Inc, founded in 1984 and headquartered in Brookfield, Wisconsin, is a global provider of financial services technology. The company develops and delivers integrated solutions for payments, processing, risk and compliance, customer and channel management, and business insights and optimization. Serving thousands of clients, Fiserv supports banks, credit unions, securities broker-dealers, leasing and finance companies, and retailers.
Fiserv’s core offerings include account processing systems that automate deposit, lending and transaction processing for financial institutions, as well as digital banking platforms that enable mobile and online banking services.
This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected].
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Experian has teamed with Fiserv to help merchants stem the tide of artificial intelligence (AI)-powered fraud.
The collaboration involves the addition of real‑time debit card verification for Experian Link, the company’s payment authentication tool, Experian said in a news release Wednesday (May 27).
“As AI accelerates the speed and sophistication of fraud, merchants need precise, instant verification that confirms the customer behind a payment is truly who they say they are without introducing added friction,” said Kathleen Peters, chief innovation officer, fraud and identity at Experian North America.
“By integrating Fiserv’s proprietary debit card data into Experian Link alongside our robust identity and fraud insights, clients can further reduce false declines, lower fraud rates and confidently approve more legitimate customers,” Peters added.
Experian Link will leverage Fiserv’s VerifyNow Advantage with newly improved verification capabilities that determine bank account and debit card ownership verification in real time.
The release noted that the collaboration is happening at a time when generative artificial intelligence (AI) tools are helping fraudsters expand their attacks and mimic consumer behavior, putting more pressure on merchants to tighten risk controls.
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But these controls can trigger more false declines, unintentionally blocking legitimate customers, a problem that costs merchants billions per year, the release said.
“Merchants need real‑time intelligence they can trust as payment fraud grows more sophisticated and AI further blurs the line between real and synthetic behavior,” said Dennis Becker, senior vice president of fraud, data and analytics solutions at Fiserv. “By combining debit card verification from Fiserv with Experian’s identity insights and analytics, we’re enabling merchants to validate payments faster and with greater accuracy, strengthening fraud defenses without adding friction for customers.”
As PYMNTS wrote earlier this week, the problem of false declines is compounded by the rise of agentic AI, as “the consumer may never directly participate in the checkout process.”
That report gave the example of an AI assistant authorized to reorder household goods, compare airline pricing or put together a shopping basket across merchants.
“If the transaction is declined because the purchase pattern appears unusual, the consumer may never see a checkout screen or receive context around the rejection,” PYMNTS wrote. “The failed authorization becomes invisible friction. Repeated enough times, it weakens trust not only in the merchant or issuer but in the AI workflow itself.”
False declines are also tough to diagnose in an agentic environment because the transaction path itself can change. Traditional disputes often center around a shopper recognizing a failed purchase and trying again.
“Agentic systems may abandon the attempt, substitute another merchant or alter the purchase decision without intervention,” PYMNTS wrote.
NEW YORK and SAN FRANCISCO, May 28, 2026 (GLOBE NEWSWIRE) -- Fiserv, Inc. (NASDAQ: FISV), a leading global provider of payments and financial technology, and Cognition, the AI agent lab, today announced a strategic partnership to deploy Cognition’s AI software engineer, Devin, to accelerate the modernization of core banking technology and shorten the time it takes for new capabilities to reach Fiserv financial institution clients. By shortening release cycles and strengthening platform performance, the partnership supports Fiserv’s ability to deliver innovation at speed, while maintaining stability, security, and resilience.
Modernization is among the most significant and historically slowest initiatives in financial services. Devin is uniquely suited to accelerate this work, operating at scale across complex codebases. Fiserv plans to deploy Devin across core platform modernization and other strategic engineering initiatives — executing complex engineering work in parallel and accelerating the pace at which Fiserv ships new capabilities to clients. As part of the deployment, Fiserv is also strengthening governance and security controls for AI-assisted development to help protect the integrity of the software lifecycle.
This partnership builds on Fiserv's broader commitment to embed AI across its technology operations and product development in ways that translate into tangible client value. Devin's ability to take on end-to-end engineering tasks including understanding codebases, writing, and testing code, and iterating autonomously, extends engineering capacity so teams can focus on delivering high-quality improvements that matter most to clients, from shipping enhancements, strengthening quality checks, to improving platform resilience.
The collaboration reflects Fiserv's strategy to bring AI into every part of how it serves financial institutions — from the technology and engineering that power Fiserv platforms, to the operations that support them.
"Speed matters more than ever in banking, and our clients are counting on us to deliver. With Devin, we can accelerate modernization of the platforms our clients run their business on, ship new capabilities faster, and free our teams to focus on the work that matters most," said Dhivya Suryadevara, Co-President of Fiserv.
"Fiserv is exactly the kind of organization where Devin creates compounding value — massive scale and an engineering organization that has ambitious goals for what it needs to build and maintain," said Russell Kaplan, Co-Founder and President, Cognition. "We are proud to partner with Fiserv to help teams deliver measurable improvements, so clients see faster access to new capabilities, more consistent releases, and continued focus on quality and security."
Fiserv is among a growing number of financial services organizations deploying Devin to accelerate product delivery, modernize platforms, expand automated testing, and strengthen governance for AI-assisted development ensuring innovation reaches clients faster and more reliably.
About Cognition
Cognition is the leading AI software engineering company and makers of Devin, the world's first AI software engineer. Devin works end-to-end on complex engineering tasks — planning, coding, testing, and iterating autonomously — enabling teams to scale their engineering capacity without scaling headcount. Cognition is partnered with leading enterprises across financial services, technology, and beyond. Learn more at cognition.ai.
About Fiserv
Fiserv, Inc. (NASDAQ: FISV), a Fortune 500 company, is a global leader uniting commerce and finance. At the intersection of banking and commerce, the company powers sustained growth and innovation at scale for financial institutions and businesses worldwide across payments, account processing, digital banking, merchant acquiring, network services, e-commerce, and Clover®, the all-in-one business management platform. Fiserv is a member of the S&P 500® Index and one of FORTUNE® America’s Most Innovative Companies. Visit fiserv.com and follow on social media for more information and the latest company news.
For more information contact:
Media Relations:
Chase Wallace
Senior Director, Communications
470-481-2555 [email protected]
Payments and financial technology provider Fiserv is teaming with AI agent lab Cognition.
The collaboration will see the companies use artificial intelligence (AI) software engineer, Devin, to modernize core banking technology and shorten the time it takes for new capabilities to reach Fiserv financial institution customers, Fiserv said in a Thursday (May 28) news release.
“Modernization is among the most significant and historically slowest initiatives in financial services,” the release added.
“Devin is uniquely suited to accelerate this work, operating at scale across complex codebases. Fiserv plans to deploy Devin across core platform modernization and other strategic engineering initiatives — executing complex engineering work in parallel and accelerating the pace at which Fiserv ships new capabilities to clients.”
The release said the partnership builds on Fiserv’s broader effort to embed AI into its technology operations and product development to help clients.
Devin’s engineering abilities — such as understanding codebases, writing and testing code, and iterating autonomously — extends engineering capacity so teams can concentrate on things like shipping enhancements, strengthening quality checks, and improving platform resilience, the news release added.
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“Speed matters more than ever in banking, and our clients are counting on us to deliver,” said Dhivya Suryadevara, co-president of Fiserv.
“With Devin, we can accelerate modernization of the platforms our clients run their business on, ship new capabilities faster, and free our teams to focus on the work that matters most.”
The partnership comes one day after Cognition announced it had raised $1 billion in a new funding round, valuing the company at $26 billion. The startup said it would use the new funding to continue expanding Devin.
“We launched Devin two years ago as the first AI software engineer,” Cognition said in its announcement. “Since then, cloud agents have gone from niche to mainstream, and today they are the fastest growing way to create software.”
Meanwhile, Fiserv earlier this month announced an agentic AI operating system designed for banking, as well as a collaboration with OpenAI to put frontier AI to work at financial institutions.
The new operating system, agentOS, was created to help financial institutions deploy, manage and scale AI agents across their workflows.
“Banks have spent years building the data pipes,” PYMNTS wrote soon after. “This week, the industry confronted what happens when AI agents start running through them: who builds the infrastructure, who sets the rules and who captures the value.”
See More In: AI, B2B, B2B Payments, banking, banking technology, Cognition, Fiserv, News, PYMNTS News, What's Hot, What's Hot In B2B
Block’s Pivot to Profits and AI Is Turning HeadsFiserv NASDAQ: FISV President and CEO Mike Lyons said the payments and financial technology company is working to restore what he described as its historically predictable, mid-single-digit revenue growth profile after a difficult year for investors.
Speaking at a Bernstein-hosted discussion with senior analyst Harshita Rawat, Lyons said Fiserv’s review of its franchise last fall found that, excluding post-COVID cyclical benefits, the company’s growth profile looked more like its pre-pandemic pattern. He said the review also identified areas requiring action, including client service, product delivery, technology resilience and capital allocation.
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Shift4’s Explosive Growth Comes With High-Stakes Risk“We know the last year has been difficult for our investors, and we don’t take that lightly,” Lyons said. He added that the review confirmed what management views as the underlying strength of Fiserv’s core businesses, including number one positions in digital banking, core banking, issuer processing and payments, along with leading positions in small business payments and enterprise.
Management Emphasizes “One Fiserv” Plan and AI Lyons said the company launched its “One Fiserv Action Plan,” centered on a client-first mindset and five pillars intended to address operational issues and support growth. He said the effort has included leadership changes, greater accountability, cultural shifts, employee engagement and a broader embrace of artificial intelligence.
The Quiet Infrastructure Play on Small-Bank SurvivalLyons said Fiserv has built a leadership team that is roughly half new and half existing across an expanded group of about 40 to 50 leaders. He highlighted Dhivya Suryadevara, who leads financial services, and Takis Georgakopoulos, who leads merchant services, and said attrition among the company’s best-performing employees is at record low levels based on measurable history.
On AI, Lyons described a three-part approach: generating more revenue, reducing costs and improving client experience. He said AI is helping Fiserv turn its “systems of record” into “systems of greater value” through better data, higher authorization rates, lower fraud rates, data products and more personalized offers. He also cited opportunities in servicing, operations, application development and faster product delivery.
Lyons pointed to Fiserv’s OpenAI partnership announced at its Investor Day and said the company also reached a formal agreement with Cognition to use Devin, its software engineering agent, to help modernize core systems in Fiserv’s financial services business.
AgentOS Positioned as Bridge Between Banks and AI Agents Lyons discussed agentOS, a product introduced at Fiserv’s Investor Day that is designed to help banks safely deploy AI agents and connect agents to bank systems. He said banks have raised concerns about allowing agents into core systems and personally identifiable information, while agent developers often do not want to handle regulated data directly.
Fiserv’s role, Lyons said, is to sit between banks and agents, managing items such as data masking, access controls and “kill switches.” He said agentOS includes an agent marketplace where third parties, banks, Fiserv or even competitors could create agents for bank use cases.
The product was co-developed with six banks, Lyons said, and two beta versions are live. He said Fiserv has received significant inbound interest from both banks and agent developers since Investor Day. Lyons said agentOS is not included in the company’s medium-term guidance but could expand Fiserv’s market opportunity in workflow automation and value-added banking services.
Clover Growth Remains Central to Merchant Strategy In merchant solutions, Lyons said Clover is central to Fiserv’s path toward 6% to 8% revenue growth in the segment. The company has laid out targets of 10% to 15% volume growth and 15% to 20% revenue growth for Clover.
Lyons said the 10% organic volume growth target is based on Clover’s performance since 2022, when quarterly growth has generally ranged from 8% to 12% and averaged about 10%. He said incremental upside could come from converting non-Clover small and midsize business customers to Clover.
Growth drivers include greater horizontal capabilities, vertical expansion, international growth, improved customer experience and broader distribution, Lyons said. He cited Clover Capital, Clover Savings, ADP and Homebase as horizontal opportunities, and said Fiserv recently launched healthcare and professional services offerings. He also highlighted international growth in Canada and Brazil and said Japan is coming online with Visa and SMCC as partners.
Lyons said international volume now represents more than 20% of total Clover volume and is growing faster from a smaller base. He also said Fiserv has extensive distribution through approximately 3,000 independent sales organizations and 1,000 banks.
Fiserv’s non-Clover small business base remains a significant opportunity, Lyons said, with about $4 billion of revenue, 1.8 million SMBs and roughly $700 billion in gross payment volume. He described the base as stable and generally satisfied, saying Fiserv intends to be thoughtful about conversions rather than forcing customers to migrate.
Financial Services Focuses on Core Stabilization and Payments Lyons said Fiserv’s core banking business has faced higher-than-desired attrition tied to past client service issues, missed product deadlines and forced conversions. He said the company has reversed course by supporting all cores, investing in client-facing personnel and technology, adding value-added services, and giving clients more choice in modernization paths.
He said management expects a gradual path from 2026 to 2029 toward more normalized attrition, noting that current results reflect decisions made in prior years because of long-dated contracts.
In digital payments, Lyons described the business as just under $4 billion in revenue and said Fiserv serves 41 of the 50 largest U.S. banks for payments. He said end markets remain healthy, supported by real-time, digital and embedded payment trends. Fiserv is working to unify multiple payment solutions into broader platforms for individual and business payments, with an intelligence layer to help determine the best payment method.
Lyons also discussed issuer processing, a roughly $3.3 billion revenue business, saying Fiserv has 25 of the 50 largest issuers and eight of the top 10 private-label issuers. He said the company is modernizing Optis, its major issuer platform, while developing Vision Next as a modern card core intended for embedded finance, international expansion and new issuing clients.
Emerging Opportunities Include Deposits, Stablecoins and Data Lyons said Fiserv’s acquisition of StoneCastle supports the Fiserv Deposit Network, which connects cash holders with banks seeking deposits through fully FDIC-insured accounts. He said Clover merchants will be able to move idle cash through the Clover Dashboard into StoneCastle’s network to seek competitive rates, while banks can access insured operating deposits.
He also said StoneCastle brought stablecoin and cryptocurrency custody capabilities. Fiserv has created FIUSD, a stablecoin intended to help banks meet future regulatory requirements and offer stablecoin and fiat wallets within a single demand deposit account. Lyons said FIUSD is expected to go live in July, with an initial publicly announced use case in North Dakota involving bank-to-bank money movement through the Roughrider Coin, a white-label version of FIUSD.
Asked what investors may misunderstand about Fiserv, Lyons said the company is not trying to recover from a permanent loss of competitive position after a drop from double-digit growth. Instead, he characterized the post-COVID growth period as the anomaly and said Fiserv is trying to reclaim its historical identity as a mid-single-digit revenue grower that generates cash and double-digit earnings-per-share growth.
He also said investors may underestimate the revenue and cost opportunities from AI and the potential synergies from Fiserv’s mix of banking, issuing, large merchant and small merchant businesses.
About Fiserv NASDAQ: FISVFiserv, Inc, founded in 1984 and headquartered in Brookfield, Wisconsin, is a global provider of financial services technology. The company develops and delivers integrated solutions for payments, processing, risk and compliance, customer and channel management, and business insights and optimization. Serving thousands of clients, Fiserv supports banks, credit unions, securities broker-dealers, leasing and finance companies, and retailers.
Fiserv’s core offerings include account processing systems that automate deposit, lending and transaction processing for financial institutions, as well as digital banking platforms that enable mobile and online banking services.
This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected].
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Banks spent years treating core modernization as a lengthy infrastructure project. Dhivya Suryadevara believes artificial intelligence may alter that timetable.
In a conversation with PYMNTS CEO Karen Webster, the Fiserv co-president described AI as a practical tool for rewriting operational workflows, simplifying implementations and modernizing aging banking systems without forcing financial institutions into wholesale platform replacements.
Suryadevara joined Fiserv after senior leadership roles at Stripe, General Motors and UnitedHealth Group. She said the scale of Fiserv’s banking and payments franchise, combined with its access to data and distribution, made the company well positioned for the AI age.
“What struck me right away is just the sheer scale that Fiserv has on the banking side, as well as the merchant side,” Suryadevara said.
The discussion centered on what Suryadevara called the company’s “stabilize, attach and grow” strategy, a framework she said applies primarily to the banking segment of the business. The stabilization effort focuses on servicing, operational resiliency and execution after periods of disruption tied to client support and technology incidents.
Fiserv has committed more than $150 million toward service improvements and technology resiliency initiatives spanning 2025 and 2026.
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The broader objective is modernization without forcing banks into abrupt platform overhauls. Suryadevara said banks increasingly want the ability to modernize individual systems, such as teller functions or digital capabilities, while remaining on existing cores.
That philosophy also extends into payments and issuer processing, two businesses she described as among Fiserv’s strongest franchises. The payments unit includes debit processing, Zelle and account-to-account payment capabilities, while the issuer business remains anchored in credit card processing.
AI now sits at the center of that modernization effort.
Suryadevara said the technology is helping accelerate work that previously consumed years, particularly in areas such as legacy code conversion, implementations and servicing operations. She pointed to advances in rewriting COBOL-based systems and simplifying implementation processes that historically required large amounts of manual work.
“It’s about rewriting entire workflows for the AI era,” she said.
Rather than applying AI incrementally to existing processes, Suryadevara argued banks should reconsider whether entire steps can be removed altogether. She described implementations as one example where AI can materially reduce operational friction and shorten conversion timelines.
The conversation also explored agent-based banking systems, including Fiserv’s Agent OS initiative. Suryadevara described the platform as a governed operating layer that allows banks to deploy AI agents while maintaining policy controls, auditability and regulatory oversight.
The system is designed to support three categories of agents: Fiserv-developed agents, bank-developed agents and third-party agents delivered through a marketplace model.
Those agents are aimed at operational workflows tied to areas such as compliance, fraud management, reporting and deposit servicing. Suryadevara said banks are increasingly interested in using AI to automate repetitive operational work while preserving governance controls required in regulated industries.
The push arrives as banks face mounting pressure to modernize infrastructure while preserving existing customer relationships and operational continuity. Earlier PYMNTS coverage of Fiserv’s issuer business framed that transition as a shift away from treating processing as invisible back-office plumbing and toward viewing it as a strategic layer tied to data, credentials and decisioning.
Suryadevara suggested AI may further raise the stakes because banks increasingly need systems capable of supporting real-time data access, automated workflows and emerging payment models.
“There’s such an opportunity to deploy AI and simplify workflows at scale, but also in a very responsible, compliant way,” she said.
Additional Takeaways
Fiserv notes that banks increasingly want open API ecosystems that allow them to integrate FinTech partners and third-party services without losing control of core infrastructure. Suryadevara said AI is already being used inside servicing operations to resolve client tickets before they reach human agents. The company sees agent marketplaces as a future business opportunity because banks may increasingly purchase workflow-specific AI tools through governed platforms. Dhivya Suryadevara is co-president at Fiserv, where she oversees the company’s financial solutions business.
PYMNTS CEO Karen Webster is one of the world’s leading experts in payments innovation and the digital economy, advising multinational companies and sitting on boards of emerging AI, healthtech and real-time payments firms, including a non-executive director on the Sezzle board, a publicly traded BNPL provider. She founded PYMNTS.com in 2009, a top media platform covering innovation in payments, commerce and the digital economy. Webster is also the author of the NEXT newsletter and a co-founder of Market Platform Dynamics, specializing in driving and monetizing innovation across industries.
NEW YORK, June 02, 2026 (GLOBE NEWSWIRE) -- Fiserv, Inc. (NASDAQ: FISV), a leading global provider of payments and financial services technology, today announced at Snowflake Summit 26, that it has been named the 2026 Financial Services Product Partner of the Year by Snowflake, the AI Data Cloud company. The award recognizes the financial services product partner whose application, solution, or offering delivered the strongest industry-specific value on Snowflake through differentiated capabilities, customer relevance, and measurable business impact.
Fiserv earns this recognition for its achievements leveraging Snowflake AI Data Cloud, helping customers eliminate data silos and transform fragmented payments information into actionable business intelligence.
"Data is the lifeblood of the modern economy, but its true value lies in accessibility and action," said Sanjay Saraf, Chief Product Officer, Merchant Solutions, at Fiserv. "Being named Snowflake’s Financial Services Product Partner of the Year validates our commitment to helping clients unlock greater value from their data. By providing more ways for merchants to access and use payments data, Fiserv can transform transactions into strategic assets, empowering informed decisions, accelerate growth, and confidently navigate the evolving landscape of commerce."
By integrating its significant proprietary data ecosystem with Snowflake to deliver Data-as-a-Service, Fiserv enables enterprise merchants to securely share and access payments data in real time. This approach minimizes unnecessary data movement and reduces operational overhead, allowing clients to concentrate on leveraging data for business outcomes rather than managing complex pipelines.
In addition, Fiserv offers thousands of financial institutions streamlined access to their data via the Snowflake platform, helping them gain insights, personalize services, and advance AI use across banking, cards, and payments solutions.
"Fiserv is a great example of how leaders in the financial services industry leverage the Snowflake AI Data Cloud to drive tangible value for the enterprise," said Amy Kodl, SVP, Worldwide Alliances & Channels at Snowflake. "By providing a governed, scalable foundation for payments data, Fiserv allows our joint customers to bypass traditional pipeline bottlenecks and move straight to innovation. Their approach to Data-as-a-Service is a blueprint for how companies can use timely data and AI to stay lean while remaining incredibly competitive."
In addition to Data-as-a-service, Fiserv offers access to payments data through pre-built dashboards, APIs, and BI tools to support a wide range of analytics and reporting needs across the company.
Learn more about Fiserv and Snowflake here. Check out keynotes from Snowflake Summit 2026 live or on-demand here and stay on top of the latest news and announcements from Snowflake on LinkedIn and X.
About Fiserv
Fiserv, Inc. (NASDAQ: FISV), a Fortune 500 company, moves more than money. As a global leader in payments and financial technology, the company helps clients achieve best-in-class results through a commitment to innovation and excellence in areas including account processing and digital banking solutions; card issuer processing and network services; payments; e-commerce; merchant acquiring and processing; and Clover®, the world’s smartest point-of-sale system and business management platform. Fiserv is a member of the S&P 500® Index and one of TIME Magazine’s Most Influential Companies™. Visit fiserv.com and follow on social media for more information and the latest company news.
Media Relations:
Torrie Miers
Director, Communications - Merchant Solutions
Fiserv, Inc.
+1-470-669-5181 [email protected]
