AGI (NYSE:AGBK) Posts Quarterly Earnings Results, Hits Estimates

AGI (NYSE:AGBK) issued its quarterly earnings data on Wednesday. The company reported $0.28 earnings per share (EPS) for the quarter, meeting analysts’ consensus estimates of $0.28, Zacks reports.

Here are the key takeaways from AGI’s conference call:

• Operational momentum accelerated in Q2, with BRL 7 billion in gross credit originations, more than 600,000 new customers, 7.6 million active customers, and fee revenue up 35% quarter over quarter.
• Agibank’s credit portfolio grew 21% year over year to BRL 37.1 billion, while INSS payroll market share reached 9.6% and private payroll balances rose 48% sequentially; management expects continued growth in the second half.
• The newly launched Agi+ subscription platform reached more than 250,000 subscribers in 45 days, with annual revenue per customer estimated at about BRL 600 and an expected contribution margin near 80%; management is targeting 1 million subscribers by year-end.
• Profitability remains pressured by upfront customer acquisition, servicing, technology, and provisioning costs tied to rapid growth. Pre-tax profit reportedly fell 47% quarter over quarter, while after-provision NIM declined 50 basis points to 6.8%.
• Credit quality improved, with 90-plus-day NPLs declining to 3.3% and coverage at 182%, although the cost of credit remained elevated at approximately 5.9% and management expects high interest rates to continue weighing on spreads.

AGI Stock Down 2.6%

AGI stock traded down $0.18 during mid-day trading on Wednesday, hitting $6.82. 409,650 shares of the stock were exchanged, compared to its average volume of 503,080. The firm has a market capitalization of $1.09 billion and a PE ratio of 22.00. AGI has a 12 month low of $6.32 and a 12 month high of $12.21. The firm’s fifty day moving average price is $6.99.

Analyst Upgrades and Downgrades

Several equities analysts have issued reports on AGBK shares. Weiss Ratings assumed coverage on shares of AGI in a research report on Tuesday, May 12th. They issued a “sell (d)” rating for the company. Itau BBA Securities cut shares of AGI from an “outperform” rating to a “market perform” rating and set a $9.00 price objective on the stock. in a research note on Wednesday, May 6th. Susquehanna set a $14.00 price objective on AGI in a report on Friday, May 8th. Finally, Zacks Research lowered AGI from a “hold” rating to a “strong sell” rating in a research report on Thursday, July 16th. Six investment analysts have rated the stock with a Buy rating, one has given a Hold rating and two have assigned a Sell rating to the stock. Based on data from MarketBeat.com, the company presently has an average rating of “Hold” and a consensus target price of $15.86.

About AGI

Our mission is to revolutionize financial services for the largest and fastest growing segment of Brazil’s population: individuals who have been underserved by incumbent banks and have not been effectively reached by digital-only banks. We seek to make credit and banking solutions more accessible and affordable for the Brazilian consumers who we believe need it the most, including social security beneficiaries and private and public sector workers. We have designed a unique value proposition for this population, who may be older, have a lower income, be less tech-savvy or have less access to education.