Pagseguro Digital (PAGS) AI Stock Analysis

• Market Cap: $3.19B
• Dividend Yield: 1.36%
• Average Volume (3M): 4.69M
• Price to Earnings (P/E): 7.5
• Beta (1Y): 1.01
• Revenue Growth: 0.58%
• EPS Growth: 5.76%
• Country: US
• Employees: 6,751
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Infrastructure
• EPS (TTM): 0.36
• Shares Outstanding: 209,148,910
• 10 Day Avg. Volume: 6,220,134
• 30 Day Avg. Volume: 4,694,260
• PEG Ratio: 0.19
• Price to Book (P/B): 0.85
• Price to Sales (P/S): 0.68
• P/FCF Ratio: -2.73
• Enterprise Value/Market Cap: 3.11
• Enterprise Value/Revenue: 0.51
• Enterprise Value/Gross Profit: 1.01
• Enterprise Value/Ebitda: 1.11
• 1Y Price Target: $10.00
• Price Target Upside: 10.74% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 5
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 75 Outperform
• Price Target: $11.00 ▲(21.82% Upside)

Pagseguro Digital's strong financial performance and attractive valuation are key strengths, supported by solid revenue growth and profitability. The earnings call provided positive insights into client and revenue growth, though economic challenges and high leverage pose risks. Technical indicators suggest a neutral to slightly bullish trend, contributing to an overall favorable stock score.

Positive Factors

Revenue Growth

The consistent revenue growth indicates strong market demand and effective business strategies, supporting long-term financial stability.

Banking Segment Expansion

The rapid growth in the banking segment highlights its potential as a significant revenue driver, enhancing diversification and resilience.

Cash Flow Management

Strong cash flow management ensures liquidity and financial flexibility, enabling strategic investments and shareholder returns.

Negative Factors

High Debt Levels

High leverage can increase financial risk and limit the company's ability to invest in growth opportunities, affecting long-term stability.

Leadership Changes

Leadership changes can create uncertainty and impact strategic direction, potentially affecting the company's market positioning.

Interest Rate Impact

Rising interest rates increase financial costs, which can pressure margins and reduce profitability, challenging long-term financial performance.

Pagseguro Digital Business Overview & Revenue Model

Company Description

Pagseguro Digital (PAGS) is a leading financial technology company based in Brazil, specializing in digital payment solutions and financial services for both consumers and merchants. The company operates primarily in the e-commerce and mobile payment sectors, offering a wide range of products including payment processing, point-of-sale solutions, and digital wallets. Pagseguro aims to simplify transactions and enhance the financial experiences for users across various platforms, contributing to the growth of online commerce in Brazil and Latin America.

How the Company Makes Money

Pagseguro generates revenue through multiple streams, primarily by charging transaction fees on payment processing services provided to merchants. When businesses use Pagseguro's platform to process credit card, debit card, and online payments, the company takes a percentage of each transaction as a fee. Additionally, Pagseguro earns revenue from providing financial services, such as loans and credit products to small and medium-sized enterprises (SMEs) and consumers. The company may also generate income through its subscription services, which offer enhanced features and tools for merchants. Key partnerships with banks, financial institutions, and e-commerce platforms further bolster its revenue, while the growing adoption of digital payments in Brazil and the region contributes significantly to its earnings growth.

Pagseguro Digital Financial Statement Overview

Summary

Pagseguro Digital demonstrates strong revenue growth and profitability with a solid gross profit margin of 50.04% and an EBIT margin of 36.49%. However, the high debt-to-equity ratio of 2.81 poses a risk, and the slight decline in net profit margin indicates potential cost pressures. Cash flow management is strong with impressive free cash flow growth, but the low operating cash flow to net income ratio suggests challenges in converting income to cash.

Income Statement

Pagseguro Digital shows strong revenue growth with a TTM increase of 9.4% and consistent profitability, evidenced by a solid gross profit margin of 50.04% and an EBIT margin of 36.49%. The net profit margin is stable at 11.35%, indicating efficient cost management. However, the slight decline in net profit margin compared to previous years suggests potential cost pressures.

Balance Sheet

The company has a high debt-to-equity ratio of 2.81, indicating significant leverage, which could pose risks if not managed properly. However, the return on equity is strong at 14.99%, showing effective use of equity to generate profits. The equity ratio is moderate, suggesting a balanced asset structure.

Cash Flow

Pagseguro Digital demonstrates impressive free cash flow growth of 1607.20% TTM, reflecting strong cash generation capabilities. The operating cash flow to net income ratio is low at 0.11, indicating potential challenges in converting income to cash. However, the free cash flow to net income ratio is healthy at 0.62, suggesting good cash flow management.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	19.52B	18.33B	15.68B	15.16B	10.30B	6.69B
Gross Profit	9.77B	8.79B	7.55B	7.69B	4.52B	2.91B
EBITDA	8.89B	7.54B	6.64B	6.19B	2.89B	2.11B
Net Income	2.22B	2.12B	1.65B	1.50B	1.17B	1.29B
Balance Sheet
Total Assets	72.29B	72.90B	55.11B	45.33B	5.58B	4.30B
Cash, Cash Equivalents and Short-Term Investments	1.89B	1.42B	6.21B	2.93B	462.66M	504.39M
Total Debt	41.85B	40.64B	16.38B	12.00B	755.30M	161.36M
Total Liabilities	57.40B	58.23B	41.87B	33.49B	3.69B	2.50B
Stockholders Equity	14.89B	14.67B	13.24B	11.84B	1.89B	1.79B
Cash Flow
Free Cash Flow	3.13B	-5.74B	2.01B	1.41B	-853.82M	106.11M
Operating Cash Flow	5.03B	-3.42B	4.00B	3.55B	898.01M	2.15B
Investing Cash Flow	-1.88B	-1.83B	-2.70B	-2.18B	-1.47B	-1.86B
Financing Cash Flow	-2.44B	3.27B	-225.99M	-1.33B	727.24M	-55.06M

Pagseguro Digital Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 9.03
• 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 9.03 is below the 20-day moving average (MA) of 9.56, below the 50-day MA of 9.51, and above the 200-day MA of 8.69, indicating a bullish trend. The MACD of 0.11 indicates Negative momentum. The RSI at 57.60 is Neutral, neither overbought nor oversold. The STOCH value of 67.52 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
PAGS	75 Outperform	$3.19B	7.49	14.28%	1.36%	0.58%	5.76%
DLO	73 Outperform	$3.90B	25.70	32.78%	―	22.02%	12.42%
PAYO	69 Neutral	$2.05B	30.26	9.79%	―	10.58%	-45.52%
EEFT	66 Neutral	$3.09B	10.70	23.10%	―	7.25%	-1.12%
MQ	64 Neutral	$2.08B	―	-4.10%	―	20.11%	-391.61%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
STNE	47 Neutral	$4.33B	―	-7.53%	―	-25.51%	-139.31%

Pagseguro Digital Corporate Events

PagSeguro Digital Announces Executive Leadership Changes

On November 12, 2025, PagSeguro Digital Ltd. announced changes in its senior management, with Carlos Mauad appointed as the new Chief Executive Officer and Gustavo Bahia Gama Sechin as the Chief Financial Officer and Chief Accounting Officer, effective January 1, 2026. These appointments follow the stepping down of current executives Alexandre Magnani and Artur Schunck, who will be proposed for positions on the company’s Board of Directors. This leadership transition is expected to influence PagSeguro’s strategic direction and potentially impact its market positioning within the Brazilian financial technology sector.

PagSeguro Digital Announces Extraordinary General Meeting for Director Elections

PagSeguro Digital Ltd. has announced an Extraordinary General Meeting scheduled for December 19, 2025, in São Paulo, Brazil. The meeting will address the election of Mr. Alexandre Magnani and Mr. Artur Schunck as directors, effective January 1, 2026, until the next Annual General Meeting. This meeting is significant as it will influence the company’s leadership structure, potentially impacting its strategic direction and stakeholder relations.

PagSeguro Digital Reports Q3 2025 Financial Results

PagSeguro Digital Ltd. released its unaudited condensed consolidated interim financial statements for the period ending September 30, 2025. The financial report highlights a decrease in total assets from December 31, 2024, to September 30, 2025, alongside a reduction in liabilities, indicating a shift in the company’s financial structure. The report provides insights into the company’s financial health, which could impact its market positioning and stakeholder confidence.

PagSeguro Digital Announces Strong Q3 2025 Results and Strategic Goals

PagSeguro Digital Ltd. reported its third-quarter results for 2025, highlighting a 14% year-over-year increase in consolidated revenues, driven by its banking segment and strategic repricing. Despite challenges from high interest rates and low economic activity, the company managed to maintain profitability through financial discipline and operational efficiency. The company also announced long-term goals, including a target credit portfolio of R$25 billion by 2029, and plans to return over R$5.5 billion to shareholders by the end of 2026, reinforcing its commitment to sustainable growth and shareholder value.

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.