PagSeguro Digital (NYSE:PAGS) shareholders have endured a 69% loss from investing in the stock three years ago

The truth is that if you invest for long enough, you're going to end up with some losing stocks. But long term PagSeguro Digital Ltd. (NYSE:PAGS) shareholders have had a particularly rough ride in the last three year. Sadly for them, the share price is down 69% in that time.

With that in mind, it's worth seeing if the company's underlying fundamentals have been the driver of long term performance, or if there are some discrepancies.

View our latest analysis for PagSeguro Digital

To paraphrase Benjamin Graham: Over the short term the market is a voting machine, but over the long term it's a weighing machine. One flawed but reasonable way to assess how sentiment around a company has changed is to compare the earnings per share (EPS) with the share price.

During the unfortunate three years of share price decline, PagSeguro Digital actually saw its earnings per share (EPS) improve by 10% per year. This is quite a puzzle, and suggests there might be something temporarily buoying the share price. Or else the company was over-hyped in the past, and so its growth has disappointed.

It's worth taking a look at other metrics, because the EPS growth doesn't seem to match with the falling share price.

We note that, in three years, revenue has actually grown at a 28% annual rate, so that doesn't seem to be a reason to sell shares. This analysis is just perfunctory, but it might be worth researching PagSeguro Digital more closely, as sometimes stocks fall unfairly. This could present an opportunity.

The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).

PagSeguro Digital is well known by investors, and plenty of clever analysts have tried to predict the future profit levels. If you are thinking of buying or selling PagSeguro Digital stock, you should check out this free report showing analyst consensus estimates for future profits.

A Different Perspective

PagSeguro Digital shareholders are up 3.1% for the year. But that return falls short of the market. But at least that's still a gain! Over five years the TSR has been a reduction of 10% per year, over five years. So this might be a sign the business has turned its fortunes around. It's always interesting to track share price performance over the longer term. But to understand PagSeguro Digital better, we need to consider many other factors. Even so, be aware that PagSeguro Digital is showing 1 warning sign in our investment analysis , you should know about...

For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on American exchanges.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.