Fundamentals snapshot
PAGS · NYQ · Technology · Software - Infrastructure
Current price
$10.12
52-week range
$8.42 - $12.32
Market cap
$2.79B
One-glance verdict
We don't put a cash-flow fair value on banks and insurers. For these companies the reported 'cash flow' is really just money moving between loans, deposits and trades — not the leftover profit the owners could actually pocket — so the usual method would print a misleading number.
Balance sheet
Net debt $75.83M. Interest coverage shows how many times profit covers the interest bill.
What stands out
What this company does
PagSeguro is a Brazilian company that offers financial tools, much like a digital bank and a payment processor combined, for small businesses and individual shoppers. It primarily makes money by taking a small percentage of every sale made on its payment card readers and by offering banking services like loans and credit cards. This matters because by creating a complete financial ecosystem (a one-stop-shop for both business and personal money needs), PagSeguro can keep customers deeply engaged and sell them additional services.
PagSeguro started in 2006 as an online payment platform, a part of Brazil's largest internet company, UOL, to make e-commerce (shopping on the internet) safer and easier for Brazilians. It initially focused on giving online shoppers confidence to enter their financial details. Seeing a need, the company expanded in 2013 to help small merchants and entrepreneurs accept in-person credit and debit card payments using point-of-sale (the system used to process card payments) devices, similar to Square in the U.S. This success led to its launch of PagBank in 2019, a digital bank, transforming the company from just a payment processor into a broader financial technology firm.
PagSeguro provides tools for small businesses and individuals in Brazil to manage their money and get paid. Think of it as a combination of a payment service like PayPal and a modern digital bank like Chime, all in one. For businesses, it offers the popular 'Moderninha' and 'Minizinha' card readers that allow even the smallest street vendor to accept credit and debit cards. For both individuals and business owners, its PagBank app offers a free digital account for paying bills, transferring money, and even getting loans and insurance, all from a smartphone.
This is the company's original and core business, focused on helping merchants get paid. It makes money by taking a small percentage fee from every transaction it processes, whether that's a customer swiping a card on a 'Moderninha' machine in a shop or paying online. This part of the business also earns revenue (the total amount of money generated from sales) by offering merchants early payment on sales that were made in installments—a very common practice in Brazil. This payment processing business is the engine that attracts millions of small business customers into the company's ecosystem.
This is the company's fast-growing digital bank, which serves both the merchants who use its payment services and regular consumers. PagBank offers a free digital account with a debit and credit card, bill payments, money transfers, and even investment and insurance options. The company makes money here from the fees associated with card usage and by using the large pool of customer deposits to offer profitable credit products, like personal and working capital (the money used for day-to-day operations) loans. This banking side is crucial because it deepens the customer relationship and creates more ways for the company to earn money beyond simple payment fees.
Management's strategy is to get customers in the door with its easy-to-use payment tools and then encourage them to use the PagBank digital account for all their financial needs. They are heavily focused on increasing customer engagement within PagBank, aiming to get more people to use it for daily banking, savings, and borrowing. A major priority is expanding their credit offerings, such as payroll loans and credit cards, which are very profitable. The company believes that by creating this complete, all-in-one financial ecosystem, it can become the main financial partner for millions of small businesses and consumers in Brazil.
Price history
Is it cheap or expensive?
For a bank or insurer, the "free cash flow" shown on its statements is mostly money flowing through loans, deposits and trades — not the leftover profit the owners could actually keep, which is what this kind of valuation needs. Running that through the usual method would spit out a meaningless number, so we leave the cash-flow fair value out here rather than show you something misleading.
Is it drowning in debt?
Net debt $75.8M. Interest coverage 1.8x.
PagSeguro Digital Ltd.'s profit covers its interest bill about 1.8 times over. and 1 peers sit below 1x, which is the danger zone where profit does not fully cover the interest bill.
Total debt $346.32M Interest coverage 1.84x This is the baseline the peer rows are being compared against.
Total debt $3.31B Interest coverage 3.62x +97% vs PAGS Carries about 2.0x more debt cushion than PAGS.
Total debt $67.37M Interest coverage 874.43x +47,375% vs PAGS Carries about 474.7x more debt cushion than PAGS.
Total debt $86.16M Interest coverage -11.78x -100% vs PAGS This peer has almost no interest-payment cushion compared with PAGS.
Total debt $1.47M Interest coverage 5.67x +208% vs PAGS Carries about 3.1x more debt cushion than PAGS.
What you should know
The numbers
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Debt comparison
What you should know