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Pagseguro Digital (PAGS)
NYSE:PAGS
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Pagseguro Digital (PAGS) AI Stock Analysis

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PAGS

Pagseguro Digital

(NYSE:PAGS)

Rating:64Neutral
Price Target:
$9.50
▲(18.45%Upside)
Pagseguro Digital's overall stock score reflects a balanced perspective of its financial health, technical indicators, and valuation. The key strengths lie in its operational efficiency and attractive valuation metrics. However, the financial risks associated with high leverage and negative cash flow, combined with weak technical momentum, temper the overall outlook. Addressing these financial and technical challenges could unlock further potential.
Positive Factors
Credit Portfolio
The credit portfolio saw substantial growth, increasing by 34% year-over-year, driven by secured products.
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
Financial Expenses
Financial expenses expanded 42% year-over-year, reflecting higher average Selic.
Market Competition
PagSeguro lost 44 basis points of TPV market share this quarter, indicating intensifying competition in the industry.

Pagseguro Digital (PAGS) vs. SPDR S&P 500 ETF (SPY)

Pagseguro Digital Business Overview & Revenue Model

Company DescriptionPagSeguro Digital Ltd. is a leading Brazilian financial technology solutions provider, primarily serving small and medium-sized businesses. The company operates in the payments sector, offering a range of products and services including point-of-sale (POS) devices, digital payment solutions, and online payment processing. PagSeguro aims to simplify transactions and expand financial inclusion by providing accessible and user-friendly payment solutions across Brazil.
How the Company Makes MoneyPagSeguro Digital generates revenue through a diversified model primarily focused on transaction fees, sales of POS devices, and financial services. The company earns a significant portion of its income by charging merchants transaction fees for processing payments through its platform, both online and offline. Additionally, PagSeguro sells POS devices to small and medium-sized businesses, which contribute to its revenue. The company also offers financial services such as PagBank, its digital banking platform, which provides services like digital accounts, prepaid cards, and credit offerings. Strategic partnerships with e-commerce platforms and financial institutions further enhance PagSeguro's ability to reach a wider customer base and drive revenue growth.

Pagseguro Digital Key Performance Indicators (KPIs)

Any
Any
Total Clients
Total Clients
Counts the number of clients using the company's services, providing insight into market reach and customer acquisition success.
Chart InsightsPagSeguro Digital's client base has shown consistent growth, reaching 33.2 million by the end of 2024, driven by strategic initiatives despite macroeconomic challenges. The earnings call highlights a robust performance with record TPV and net income growth, supported by effective repricing strategies and cost management. However, concerns around transaction yields due to PIX and client mix changes pose potential risks. Looking ahead, the company expects continued growth in gross profit and EPS, focusing on revenue enhancement and cost optimization to navigate the challenging economic environment.
Data provided by:Main Street Data

Pagseguro Digital Earnings Call Summary

Earnings Call Date:May 13, 2025
(Q4-2024)
|
% Change Since: -16.28%|
Next Earnings Date:Aug 21, 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 demonstrates strong revenue growth and operational efficiency, with impressive gross and EBIT margins. However, high leverage and cash flow challenges present financial risks. While the income statement reflects business strength, the balance sheet and cash flow statements indicate areas needing strategic focus. Overall, the company shows potential for growth but must address leverage and cash management to ensure long-term financial stability.
Income Statement
78
Positive
Pagseguro Digital shows strong revenue growth with a significant increase from previous years, particularly in TTM (Trailing-Twelve-Months), reflecting robust business expansion. The Gross Profit Margin is healthy at around 48.3%, indicating efficient cost management. Net Profit Margin is stable at approximately 11.5%, but there's room for improvement. EBIT and EBITDA margins are solid, suggesting strong operational efficiency. Overall, the income statement reflects a positive growth trajectory, albeit with some challenges in net profitability.
Balance Sheet
65
Positive
The balance sheet displays a high debt-to-equity ratio of 2.56, which indicates significant leverage and potential financial risk. The equity ratio is moderate at 21.6%, suggesting a balanced asset financing structure. Return on Equity (ROE) is reasonable, showing effective use of shareholder funds, but high liabilities could pose long-term risks. Overall, while the company maintains a stable asset base, the high leverage warrants attention.
Cash Flow
52
Neutral
Pagseguro Digital's cash flow statement reveals challenges, with a negative Operating Cash Flow and Free Cash Flow in TTM, reflecting cash management issues. The Free Cash Flow to Net Income ratio is negative, indicating cash flow difficulties despite positive net income. While historical cash flow trends show periods of positive free cash flow, recent figures highlight the need for improved cash conversion. Overall, the cash flow position requires strategic improvements to enhance liquidity.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue18.84B18.33B15.68B15.16B10.30B6.69B
Gross Profit9.11B8.79B7.55B7.69B4.52B2.91B
EBITDA8.01B7.54B6.72B6.19B2.89B2.11B
Net Income2.16B2.12B1.65B1.50B1.17B1.29B
Balance Sheet
Total Assets69.14B72.90B55.11B45.57B31.15B22.32B
Cash, Cash Equivalents and Short-Term Investments1.61B1.42B2.90B2.95B2.58B2.62B
Total Debt38.25B4.68B16.38B12.12B4.22B838.14M
Total Liabilities54.19B58.23B41.87B33.67B20.62B13.00B
Stockholders Equity14.94B14.67B13.24B11.91B10.53B9.32B
Cash Flow
Free Cash Flow-6.41B-4.55B2.01B1.39B-883.46M106.85M
Operating Cash Flow-4.63B-3.42B4.00B3.59B929.18M2.17B
Investing Cash Flow-988.26M-1.83B-2.70B-2.25B-1.53B-1.88B
Financing Cash Flow2.20B3.27B-225.99M-1.31B764.59M-45.09M

Pagseguro Digital Technical Analysis

Technical Analysis Sentiment
Negative
Last Price8.02
Price Trends
50DMA
8.79
Negative
100DMA
8.52
Negative
200DMA
7.89
Positive
Market Momentum
MACD
-0.26
Positive
RSI
37.83
Neutral
STOCH
18.29
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PAGS, the sentiment is Negative. The current price of 8.02 is below the 20-day moving average (MA) of 8.74, below the 50-day MA of 8.79, and above the 200-day MA of 7.89, indicating a neutral trend. The MACD of -0.26 indicates Positive momentum. The RSI at 37.83 is Neutral, neither overbought nor oversold. The STOCH value of 18.29 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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 (57)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
81
Outperform
$3.09B23.9826.10%
78
Outperform
$4.49B15.3325.00%7.73%19.76%
71
Outperform
$2.43B22.4715.97%14.86%-0.94%
68
Neutral
$2.73B58.135.01%-8.44%
64
Neutral
$2.64B6.6714.36%0.20%2.38%9.88%
57
Neutral
HK$14.57B5.76-5.77%4.75%9.65%-43.80%
55
Neutral
$3.62B8.73-8.85%-14.03%-167.03%
* Technology Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
PAGS
Pagseguro Digital
8.16
-4.52
-35.65%
EEFT
Euronet Worldwide
103.78
3.49
3.48%
STNE
Stoneco
13.34
-0.07
-0.52%
PAYO
Payoneer
6.81
1.35
24.73%
MQ
Marqeta
5.79
0.47
8.83%
DLO
DLocal
10.83
3.39
45.56%
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.Date of analysis: Jul 12, 2025