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Pagseguro Digital (PAGS)
NYSE:PAGS
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Pagseguro Digital
(NYSE:PAGS)
Rating:73Outperform
Price Target:
$9.50
▲(4.40% Upside)
Positive Factors
Credit Portfolio
The credit portfolio saw substantial growth, increasing by 34% year-over-year, driven by secured products.
Revenue Growth
Take-rate came in above forecast, supported by repricing efforts, leading to double-digit revenue growth.
Shareholder Returns
The company reported that it completed more than 75% of the US$200mn buyback program and announced a US$0.14 cash dividend, implying a 1.4% dividend yield.
Negative Factors
Market Competition
PagSeguro lost 44 basis points of TPV market share this quarter, indicating intensifying competition in the industry.
Net Income
PagSeguro reported GAAP net income of R$525 million, down 12% quarter-over-quarter and up 9% year-over-year, coming in 2% below consensus and 4% below estimate.
Total Payment Volume (TPV)
There was a deceleration in Total Payment Volume (TPV) growth, coming in at 16% year-over-year, which is lower compared to previous quarters.
Pagseguro Digital (PAGS) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$2.95B
Dividend Yield1.52%
Average Volume (3M)4.69M
Price to Earnings (P/E)7.2
Beta (1Y)1.16
Revenue Growth0.09%
EPS Growth5.38%
CountryUS
Employees6,751
SectorTechnology
Sector Strength86
IndustrySoftware - Infrastructure
Share Statistics
EPS (TTM)0.35
Shares Outstanding209,148,910
10 Day Avg. Volume4,582,737
30 Day Avg. Volume4,691,188
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)N/A
P/FCF RatioN/A
Enterprise Value/Market Cap3.21
Enterprise Value/Revenue0.49
Enterprise Value/Gross Profit1.00
Enterprise Value/Ebitda1.14
Forecast
1Y Price Target
$11.50Price Target Upside26.37% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering2
Pagseguro Digital Business Overview & Revenue Model
Company DescriptionPagseguro Digital (PAGS) is a Brazilian financial technology company that operates in the digital payments sector. It offers a range of services including payment processing, online and mobile payment solutions, and financial services to merchants and consumers. The company aims to facilitate e-commerce transactions and empower small businesses through its user-friendly platforms and tools, targeting both the Brazilian market and expanding its reach in Latin America.
How the Company Makes MoneyPagseguro 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 Key Performance Indicators (KPIs)
Any
Total Clients
Counts the number of clients using the company's services, providing insight into market reach and customer acquisition success.
Counts the number of clients using the company's services, providing insight into market reach and customer acquisition success.
Data provided by:
Main Street Data
Main Street DataPagseguro Digital Earnings Call Summary
Earnings Call Date:Aug 12, 2025
(Q4-2024)
| % Change Since: |
Next Earnings Date:Nov 19, 2025
Earnings Call Sentiment Positive
The earnings call demonstrated a robust performance with record TPV growth, increased net income, and strong client acquisition. Despite challenges like a higher-than-expected SELIC rate and concerns around transaction yields, the company effectively implemented strategies such as repricing and cost of funding reduction to maintain profitability.Q4-2024 Updates
Positive Updates
Record TPV Growth
Total Payment Volume (TPV) reached a record of BRL 518 billion, representing a 32% year-over-year growth.
Strong Client Growth
PagBank ended the year with 33.2 million clients, adding 2.1 million year-over-year.
Net Income and EPS Increase
Net income reached BRL 2.3 billion, a 28% growth compared to 2023, with diluted EPS growing 30%.
Banking Revenue Surge
Banking revenue set a record of BRL 513 million, growing 58% year-over-year, with gross profit from the banking segment increasing by 80%.
Successful Repricing Strategy
Strategic repricing helped mitigate the impact of higher interest rates and contributed to managing the product mix impact.
Cost of Funding Reduction
The APY for total deposits decreased by 400 basis points compared to Q4 '23, reducing the total cost of deposits to 90% of the CDI.
Negative Updates
High SELIC Rate Impact
Contrary to initial projections, the SELIC rate ended more than 300 basis points higher than anticipated, affecting financial costs.
Transaction Yield Concerns
Transaction activities revenue decreased by 8% year-over-year, suggesting a lower take rate, partly attributed to PIX and client mix changes.
Company Guidance
During the fourth quarter of 2024 earnings call for PagSeguro Digital, the company reported impressive financial performance and provided guidance for 2025. The company ended the year with 33.2 million clients, an increase of 2.1 million year-over-year. Their payment TPV reached a record BRL 518 billion, marking a 32% growth from the previous year. Net revenues rose by 18% to BRL 18.8 billion, while net income hit an all-time high of BRL 2.3 billion, a 28% increase compared to 2023. The diluted EPS on a GAAP basis climbed to BRL 6.62, representing a 30% growth. PagSeguro's return on average equity improved by 198 basis points year-over-year to 15.2%. For 2025, the company provided guidance with expectations of gross profit growth between 7% and 11%, earnings per share growth between 11% and 15%, and capital expenditures ranging from BRL 2.2 billion to BRL 2.4 billion. The company's strategic initiatives focused on increasing revenues, enhancing shareholder value, and optimizing cost structures to navigate the challenging macroeconomic environment.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.85
Very Positive
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.70
Positive
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.60
Neutral
| 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
Positive
9.10
Price Trends
8.64
Positive
8.78
Positive
7.97
Positive
Market Momentum
0.15
Negative
61.79
Neutral
92.28
Negative
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 9.1 is above the 20-day moving average (MA) of 8.78, above the 50-day MA of 8.64, and above the 200-day MA of 7.97, indicating a bullish trend. The MACD of 0.15 indicates Negative momentum. The RSI at 61.79 is Neutral, neither overbought nor oversold. The STOCH value of 92.28 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for PAGS.
Pagseguro Digital Risk Analysis
Pagseguro Digital disclosed 66 risk factors in its most recent earnings report. Pagseguro Digital reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Pagseguro Digital Peers Comparison
Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
75 Outperform | $3.74B | 12.39 | 25.94% | ― | 8.71% | 25.75% | |
75 Outperform | $2.43B | 25.67 | 13.86% | ― | 13.02% | -2.57% | |
73 Outperform | $4.05B | 33.45 | 26.10% | ― | 14.70% | -18.45% | |
73 Outperform | $2.95B | 7.25 | 14.59% | 1.52% | 0.09% | 5.38% | |
61 Neutral | $35.09B | 8.26 | -10.58% | 1.90% | 8.56% | -9.51% | |
61 Neutral | $2.77B | 56.63 | -6.51% | ― | 17.47% | -544.72% | |
56 Neutral | $4.42B | 8.73 | -8.77% | ― | -20.82% | -154.29% |
* Technology Sector Average
Performance Comparison
PAGS
Pagseguro Digital
9.10
-0.02
-0.22%
EEFT
Euronet Worldwide
90.64
-9.14
-9.16%
STNE
Stoneco
16.38
5.05
44.57%
PAYO
Payoneer
6.76
-0.26
-3.70%
MQ
Marqeta
6.11
1.20
24.44%
DLO
DLocal
13.93
5.87
72.83%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.