Pagseguro Digital (PAGS) AI Stock Analysis

• Market Cap: $3.41B
• Dividend Yield: 1.37%
• Average Volume (3M): 5.18M
• Price to Earnings (P/E): 8.3
• Beta (1Y): 1.12
• Revenue Growth: 0.09%
• EPS Growth: 5.38%
• Country: US
• Employees: 6,751
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Infrastructure
• EPS (TTM): 0.35
• Shares Outstanding: 209,148,910
• 10 Day Avg. Volume: 5,818,846
• 30 Day Avg. Volume: 5,182,218
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 2.78
• Enterprise Value/Revenue: 0.49
• Enterprise Value/Gross Profit: 1.00
• Enterprise Value/Ebitda: 1.14
• 1Y Price Target: $10.50
• Price Target Upside: 4.48% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 4

• Rating: 73 Outperform
• Price Target: $9.50 ▼(-5.47% Downside)

Pagseguro Digital's strong financial performance, particularly in revenue growth and operational efficiency, is a key strength. However, high leverage and cash flow challenges are significant risks. The stock's valuation is attractive, with a low P/E ratio suggesting potential undervaluation. Technical indicators show a neutral trend, with no strong momentum signals.

Positive Factors

Revenue Growth

Consistent revenue growth indicates expanding market reach and product adoption, supporting long-term business sustainability.

Operational Efficiency

Strong operational efficiency suggests effective management and cost control, enhancing profitability and competitiveness.

Return on Equity

High return on equity reflects the company's ability to generate profits from shareholders' investments, indicating strong management performance.

Negative Factors

High Leverage

Significant leverage can increase financial risk and limit flexibility, potentially impacting long-term financial stability.

Cash Flow Challenges

Challenges in cash flow generation can strain liquidity and hinder the company's ability to invest in growth opportunities.

Modest Net Profit Margin

A modest net profit margin suggests room for improvement in profitability, which could affect long-term earnings potential.

Pagseguro Digital Business Overview & Revenue Model

Company Description

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 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, and POS app; and operates an online platform that facilitates peer-to-peer lending. 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.

How the Company Makes Money

Pagseguro generates revenue primarily through transaction fees charged to merchants for processing payments. These fees vary based on the payment method and volume of transactions. Additionally, the company earns money from its financial services, which include credit and lending products, where it provides financing options to businesses and consumers. Other significant revenue streams come from value-added services such as fraud protection, analytics, and marketing tools. Partnerships with banks and financial institutions also enhance its offerings and contribute to its earnings by expanding its customer base and service capabilities.

Pagseguro Digital Financial Statement Overview

Summary

Pagseguro Digital shows strong revenue growth and operational efficiency, but high leverage and cash flow challenges pose risks. The income statement is robust, but the balance sheet's high debt-to-equity ratio and negative free cash flow growth indicate potential liquidity issues.

Income Statement

Pagseguro Digital shows strong revenue growth with a TTM increase of 2.47% and consistent gross profit margins around 48%. The company maintains healthy EBIT and EBITDA margins, indicating efficient operations. However, the net profit margin is relatively modest at 11.46%, suggesting room for improvement in profitability.

Balance Sheet

The company's balance sheet reflects a high debt-to-equity ratio of 2.56 in the TTM, indicating significant leverage. Despite this, the return on equity remains robust at 14.79%, demonstrating effective use of equity. The equity ratio is moderate, suggesting a balanced asset structure but highlighting potential risks due to high leverage.

Cash Flow

Cash flow analysis reveals challenges, with a negative free cash flow growth rate of -107.69% in the TTM. The operating cash flow to net income ratio is negative, indicating issues in converting income to cash. However, the free cash flow to net income ratio is strong at 1.38, suggesting effective cash generation relative to net income.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	19.31B	18.33B	15.68B	15.16B	10.30B	6.69B
Gross Profit	9.50B	8.79B	7.55B	7.69B	4.52B	2.91B
EBITDA	8.31B	7.54B	6.72B	6.19B	2.89B	2.11B
Net Income	2.19B	2.12B	1.65B	1.50B	1.17B	1.29B
Balance Sheet
Total Assets	71.19B	72.90B	55.11B	45.57B	31.15B	22.32B
Cash, Cash Equivalents and Short-Term Investments	1.58B	1.42B	2.90B	2.95B	2.58B	2.62B
Total Debt	40.62B	4.68B	16.38B	12.12B	4.22B	838.14M
Total Liabilities	56.61B	58.23B	41.87B	33.67B	20.62B	13.00B
Stockholders Equity	14.58B	14.67B	13.24B	11.91B	10.53B	9.32B
Cash Flow
Free Cash Flow	492.39M	-4.55B	2.01B	1.39B	-883.46M	106.85M
Operating Cash Flow	2.16B	-3.42B	4.00B	3.59B	929.18M	2.17B
Investing Cash Flow	-1.36B	-1.83B	-2.70B	-2.25B	-1.53B	-1.88B
Financing Cash Flow	-1.05B	3.27B	-225.99M	-1.31B	764.59M	-45.09M

Pagseguro Digital Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 10.05
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PAGS, the sentiment is Positive. The current price of 10.05 is above the 20-day moving average (MA) of 9.76, above the 50-day MA of 8.93, and above the 200-day MA of 8.16, indicating a bullish trend. The MACD of 0.41 indicates Negative momentum. The RSI at 57.75 is Neutral, neither overbought nor oversold. The STOCH value of 44.10 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for PAGS.

Pagseguro Digital Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
PAYO	75 Outperform	2.33B	24.27	12.95%	―	13.02%	-2.57%
DLO	73 Outperform	4.36B	28.58	32.57%	―	22.02%	12.42%
PAGS	73 Outperform	$3.41B	8.32	14.59%	1.37%	0.09%	5.38%
EEFT	68 Neutral	3.60B	12.02	24.48%	―	8.71%	25.75%
STNE	56 Neutral	5.10B	-27.53	-10.95%	―	-20.82%	-154.29%
MQ	54 Neutral	2.47B	-41.70	-7.67%	―	17.47%	-544.72%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%

Pagseguro Digital Corporate Events

PagSeguro Digital Sets Ambitious Financial Goals and Capital Optimization Targets

On September 18, 2025, PagSeguro Digital Ltd. announced its capital optimization targets and long-term financial goals during an investor conference call. The company aims to maintain a Basel Index target level between 18% to 22%, generating excess capital between R$2 billion and R$3 billion. PagSeguro plans to return an estimated R$3.8 billion to shareholders between 2025 and 2026 through dividends and stock buybacks. By 2029, the company targets a credit portfolio of R$25 billion, gross profit growth of over 10% CAGR, and earnings per share growth of over 16% CAGR. These initiatives are expected to enhance PagSeguro’s financial stability and shareholder value.

PagSeguro Digital to Update on Strategic Initiatives

PagSeguro Digital Ltd. announced it will host a conference call on September 18, 2025, to update stakeholders on its strategic initiatives. This event is significant as it provides insights into the company’s future plans and could impact its operations and market positioning, especially given its role in democratizing financial services in Brazil.

PagSeguro Digital Declares Special Cash Dividend for Shareholders

On September 3, 2025, PagSeguro Digital Ltd. announced that its Board of Directors approved a special cash dividend of US$0.12 per common share, to be distributed on November 3, 2025, to shareholders recorded by October 6, 2025. This decision reflects the company’s ongoing commitment to returning value to shareholders and suggests confidence in its financial stability and market conditions. The company also plans another similar dividend distribution in the next two quarters, contingent on market and financial conditions.

PagSeguro Digital Reports Strong Q2 2025 Results Amid Economic Challenges

PagSeguro Digital Ltd. reported its second quarter 2025 results, highlighting a 14.3% growth in diluted EPS for the first half of the year, driven by revenue diversification and strategic financial management amidst challenging economic conditions in Brazil. The company’s banking sector outperformed its payments sector in revenue growth, contributing over 26% to the total gross profit, and the company announced an additional dividend distribution, reflecting its commitment to sustainable growth and shareholder value.

PagSeguro Digital Releases Interim Financial Statements for June 2025

PagSeguro Digital Ltd. released its unaudited condensed consolidated interim financial statements for the period ending June 30, 2025. The report highlights a decrease in total assets to 71,193,206 thousand reais from 72,900,617 thousand reais as of December 31, 2024. The financial statement reveals a shift in the company’s current liabilities, increasing to 43,716,595 thousand reais, indicating potential adjustments in operational strategies. These financial insights may influence the company’s market positioning and stakeholder decisions.