One-glance verdict
Undervalued
$174.27 our estimate vs market $8.15
Wall Street consensus: $10.66 (-93.9% lower than our fair-value estimate)
95% below our estimate, below the bear case
Fundamentals snapshot
PagSeguro Digital Ltd.
PAGS · NYQ · Technology · Software - Infrastructure
Current price
$8.15
52-week range
$7.50 - $12.32
Market cap
$2.25B
Balance sheet
Stretched
1.84x Concerning
Net debt $72.61M. Interest coverage shows how many times profit covers the interest bill.
What stands out
3 Rewards
2 Risks
3 rewards · 2 risks
- Reward Revenue grew 8.5% last year.
- Reward Returns 14.5% on equity, ahead of 33% of its peers.
- Risk Net debt grew 326.2% over 3 years.
- Risk Stock trades 244.9% above its 5-year average P/E.
What this company does
PagSeguro Digital Ltd.
PagSeguro Digital Ltd. is a financial technology company in Brazil that offers a wide range of services like digital banking and payment processing for businesses and individuals. Think of them as a one-stop shop for managing money and payments, from accepting customer payments with their card machines to providing loans and even insurance. Their main money comes from the fees they charge for processing these transactions and from interest on loans. This is important because it shows they are deeply integrated into the daily financial lives of many Brazilians and small businesses, making their growth tied to the health of the Brazilian economy.
How the company got here
PagSeguro Digital started in 2006 in Brazil, aiming to make financial services more accessible. It began by focusing on payment solutions for small businesses and individuals who might not have easy access to traditional banking. Over the years, it expanded its offerings significantly, evolving from a simple payment processor to a broader financial technology (fintech) company. This growth was driven by identifying unmet needs in the Brazilian market for digital banking, credit, and investment services.
What it actually does
PagSeguro Digital provides a wide range of financial and payment services, primarily in Brazil. Think of it as a one-stop shop for managing money, making payments, and accessing credit, especially for individuals and small to medium-sized businesses. They offer digital banking tools, various types of cards, loans, insurance, and even investment services, all designed to be user-friendly and accessible through technology.
PagSeguro Payments
This is the core business where PagSeguro helps merchants accept payments. It includes providing point-of-sale (POS) devices, which are the machines you see in stores to swipe or tap credit and debit cards, as well as online payment solutions. Merchants pay fees for these services, allowing them to sell goods and services more easily. This segment is a significant part of PagSeguro's revenue, forming the foundation of its payment processing business.
PagBank Digital Bank
This segment represents PagSeguro's digital banking arm, offering services similar to a traditional bank but entirely online. Customers can pay bills, make deposits, transfer money, and manage their accounts through an app or website. It also provides access to credit products like payroll loans and working capital loans (money borrowed by businesses to cover short-term expenses). This part of the business aims to capture a larger share of customers' financial lives beyond just payments.
Other Financial Services
Beyond core payments and digital banking, PagSeguro offers a suite of related financial products. This includes various insurance options, such as life insurance and business insurance, designed to protect customers and their assets. They also provide investment services, helping individuals grow their money through options like stocks and fixed-income products. Additionally, they operate a marketplace for various brands and offer cashback rewards, encouraging customer loyalty and spending.
What management is betting on now
PagSeguro's management is focused on deepening its relationship with existing customers by offering more integrated financial solutions. They are pushing to grow the PagBank digital banking segment, aiming to become a primary financial institution for many Brazilians. The strategy involves cross-selling more products, like credit and investments, to their large base of payment users. They also continue to invest in technology to improve user experience and expand their service offerings in a competitive market.
Price history
How the share price has moved
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Is it cheap or expensive?
Fair value $174.27 vs current price $8.15
Wall Street consensus is the average analyst price target: $10.66 (-93.9% lower than our fair-value estimate).
Our most-likely fair value is $174.27 a share — about 2,038.3% above today's price of $8.15, so the stock currently looks cheap (undervalued).
Is it drowning in debt?
Stretched
Net debt $72.6M. Interest coverage 1.8x.
Net debt
$72.61M
Interest coverage
1.84x
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.
Stretched
Worse cushion
Baseline
Better cushion
PAGS
BASELINE
PagSeguro Digital Ltd.
Total debt $331.61M Interest coverage 1.84x This is the baseline the peer rows are being compared against.
Total debt $3.17B 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 case for and against PAGS
3 Rewards
2 Risks
Rewards
-
Revenue grew 8.5% last year.
-
Returns 14.5% on equity, ahead of 33% of its peers.
-
Free cash flow was positive in 3/10 years.
Risks
-
Net debt grew 326.2% over 3 years.
-
Stock trades 244.9% above its 5-year average P/E.
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
5.74x
Forward P/E
4.26x
P/B
0.75x
P/S
0.11x
EV/EBITDA
0.29x
PEG ratio
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Profitability
How much profit each dollar creates
Gross margin
51.5%
Operating margin
36.2%
Net margin
10.9%
ROE
14.5%
ROA
6.4%
Health
Liquidity and balance-sheet strength
Debt / equity
0.12x
Current ratio
1.55x
Quick ratio
1.44x
Total debt
$331.61M
Total cash
$259.00M
Growth
How the business has been compounding
Revenue TTM
$3.70B
Revenue 5Y CAGR
10.0%
EPS TTM
1.42
EPS 5Y CAGR
15.9%
Cash flow
How much cash the business throws off
Operating CF TTM
$1.41B
Free CF TTM
$987.31M
FCF margin
26.7%
Dividend
Shareholder payout
Yield
13.1%
Payout ratio
18.5%
Last ex-div date
2026-09-16