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1. Company Snapshot

1.a. Company Description

PagSeguro Digital Ltd., together with its subsidiaries, provides financial technology solutions and services for consumers, individual entrepreneurs, micro-merchants, and small and medium-sized companies in Brazil and internationally.The company's products and services include PagSeguro Ecosystem, a digital ecosystem that operates as a closed loop where its clients are able to address their primary day to day financial needs, including receiving and spending funds, and managing and growing their businesses; PagBank digital account, which offers banking services through the PagBank mobile app, as well as centralizes various cash-in options, functionalities, services, and cash-out options in a single ecosystem; and PlugPag, a tool for medium-sized and larger merchants that enables them to connect their point of sale (POS) device directly to their enterprise resource planning software or sales automation system through Bluetooth.It also offers cash-in solutions; online and in-person payment tools; and online gaming and cross-border digital services, as well as issues prepaid, credit, and cash cards.


In addition, the company provides functionalities, and value-added services and features, such as purchase protection mechanisms, antifraud platform, account and business management tools, and POS app; and operates an online platform that facilitates peer-to-peer lending.Further, it is involved in processing of back-office solutions, including sales reconciliation, and gateway solutions and services, as well as the capture of credit cards with acquirers and sub acquirers.The company was founded in 2006 and is headquartered in São Paulo, Brazil.

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1.b. Last Insights on PAGS

PagSeguro Digital Ltd.'s recent performance was driven by strong quarterly earnings, beating estimates with $0.36 per share. The company's digital bank, PagBank, reported a recurrent profit of BRL 571 million, with 14% growth in net revenue and 30% growth in loan portfolio. Additionally, PagSeguro Digital broke out above the 50-day moving average, indicating a significant support level. The company's solid execution and resilience in a high-interest-rate environment have been notable. According to Marketbeat.com, the stock has a consensus rating of "Hold" from brokerages.

1.c. Company Highlights

2. PagSeguro Digital Ltd. Posts Solid Q3 2025 Results Amid Challenging Macroeconomic Environment

PagSeguro Digital Ltd. reported a total revenue and income, net of interchange and card scheme fees, of BRL 3.4 billion in Q3 2025, representing a 14% increase year over year. The company's non-GAAP net income was flat year over year, while diluted EPS on a GAAP basis reached 1.814% higher year over year, coming in at $0.36, slightly above estimates of $0.35. The company's banking gross profit grew 59% year over year, now representing more than 28% of total gross profit, as highlighted by Artur Schunck, CFO, "banking gross profit growing 59% year over year and now representing more than 28% of total gross profit."

Publication Date: Nov -14

📋 Highlights
  • Client Growth:: 33.7 million clients, +1.6 million YoY.
  • Total Payment Volume (TPV):: Stable at BRL 130 billion sequentially.
  • Credit Portfolio Expansion:: Double-digit YoY growth in credit portfolio and funding base.
  • Shareholder Returns:: BRL 2 billion returned via dividends and buybacks.
  • Banking Gross Profit Surge:: +59% YoY, exceeding 28% of total gross profit.

Operational Highlights

The company ended the quarter with 33.7 million clients, growing 1.6 million clients year over year. Total payment volume remained stable sequentially and reached BRL 130 billion. The credit portfolio and funding base continue to expand at a double-digit pace compared to the same period last year.

Guidance Revision and Future Outlook

The company adjusted its guidance to align with the current market conditions, revising its gross profit growth guidance from a range of 7% to 11% to a revised range of 5% to 7%. The company also narrowed its full-year guidance for diluted EPS from 11% to 15% growth year over year to 13% to 15% growth year over year. Analysts estimate next year's revenue growth at 5.4%.

Valuation and Dividend Yield

With a P/B Ratio of 1.02 and a Dividend Yield of 4.05%, PagSeguro Digital Ltd. appears to be reasonably valued. The ROE of 14.95% indicates a relatively healthy return on equity. The company's focus on mitigating financial cost pressures while preparing to capture growth opportunities in 2026 and beyond is positive.

Leadership Updates and Strategic Focus

The company announced leadership updates, with Carlos Malaj becoming the new CEO and Gustavo Sechin becoming the new CFO, effective January 1, 2026. The company's strategic update outlined key performance indicators (KPIs) and guidance for 2029, with a focus on growing the credit portfolio and optimizing the net credit margin.

3. NewsRoom

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Head to Head Comparison: Cantaloupe (NASDAQ:CTLP) and PagSeguro Digital (NYSE:PAGS)

Nov -30

Source: defenseworld.net

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Geode Capital Management LLC Reduces Stock Position in PagSeguro Digital Ltd. $PAGS

Nov -29

Source: defenseworld.net

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PagBank registers a recurrent profit of BRL 571 million, 14% growth in net revenue, and 30% growth in the loanportfolio

Nov -13

Source: prnewswire.com

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PagSeguro Digital Ltd. (PAGS) Tops Q3 Earnings Estimates

Nov -13

Source: zacks.com

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PagSeguro Digital Ltd. (PAGS) Recently Broke Out Above the 50-Day Moving Average

Nov -12

Source: zacks.com

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PagSeguro Digital Ltd. (PAGS) Crossed Above the 20-Day Moving Average: What That Means for Investors

Nov -11

Source: zacks.com

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Contrasting PagSeguro Digital (NYSE:PAGS) and Worldline (OTCMKTS:WWLNF)

Oct -31

Source: defenseworld.net

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Buy These 5 Best Value Stocks to Make the Most of Price-to-Book Ratio

Oct -29

Source: zacks.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (9.69%)

6. Segments

Transaction Activities and Other Services

Expected Growth: 8%

PagSeguro Digital Ltd.'s 8% growth in Transaction Activities and Other Services is driven by increasing e-commerce adoption in Brazil, expanding merchant base, and growing demand for digital payment solutions. Additionally, the company's strategic partnerships, investments in technology, and competitive pricing strategy have contributed to the growth.

Financial Income

Expected Growth: 12%

PagSeguro Digital Ltd.'s 12% growth is driven by increasing e-commerce adoption in Brazil, expanding merchant base, and rising transaction volumes. Additionally, the company's investments in digital payment solutions, such as online banking and mobile payments, are contributing to its growth. Furthermore, PagSeguro's strategic partnerships with major retailers and its focus on providing innovative payment solutions are also driving its financial income.

Other Financial Income

Expected Growth: 9%

PagSeguro Digital Ltd.'s 9% growth in Other Financial Income is driven by increasing adoption of digital payment solutions, expansion into new markets, and strategic partnerships. Additionally, the company's focus on innovation, such as the development of new products and services, has contributed to this growth.

7. Detailed Products

Payment Gateway

A platform that enables online businesses to accept payments through various methods, including credit cards, boletos, and online banking.

Digital Wallet

A digital wallet that allows users to store their payment methods and make transactions online.

Online Banking

A service that enables users to make online banking transactions, such as paying bills and transferring funds.

Boleto

A payment method that allows users to pay bills and invoices using a barcode.

Point of Sale (POS) Solution

A solution that enables businesses to process transactions in-person using a mobile or desktop application.

Recurring Payments

A service that enables businesses to set up recurring payment plans for their customers.

Antifraud Solution

A solution that helps prevent fraudulent transactions and protects businesses from online fraud.

8. PagSeguro Digital Ltd.'s Porter Forces

Forces Ranking

Threat Of Substitutes

PagSeguro Digital Ltd. operates in a highly competitive market, but its strong brand recognition and customer loyalty mitigate the threat of substitutes.

Bargaining Power Of Customers

PagSeguro Digital Ltd.'s customers have limited bargaining power due to the company's strong market position and diversified customer base.

Bargaining Power Of Suppliers

PagSeguro Digital Ltd. relies on a few key suppliers, but its strong relationships and diversified supply chain mitigate the bargaining power of suppliers.

Threat Of New Entrants

The digital payments industry is highly attractive, and new entrants may pose a significant threat to PagSeguro Digital Ltd.'s market share.

Intensity Of Rivalry

The digital payments industry is highly competitive, and PagSeguro Digital Ltd. faces intense rivalry from established players and new entrants.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 2.00%
Debt Cost 12.99%
Equity Weight 98.00%
Equity Cost 12.99%
WACC 12.99%
Leverage 2.04%

11. Quality Control: PagSeguro Digital Ltd. passed 3 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Amdocs

A-Score: 5.7/10

Value: 4.9

Growth: 4.9

Quality: 7.1

Yield: 4.0

Momentum: 3.0

Volatility: 10.0

1-Year Total Return ->

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Gen Digital

A-Score: 5.4/10

Value: 3.5

Growth: 4.6

Quality: 7.0

Yield: 4.0

Momentum: 5.0

Volatility: 8.3

1-Year Total Return ->

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Stock-Card
PagSeguro Digital

A-Score: 5.4/10

Value: 5.8

Growth: 4.3

Quality: 4.9

Yield: 5.0

Momentum: 7.5

Volatility: 5.0

1-Year Total Return ->

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Stock-Card
DLocal

A-Score: 5.2/10

Value: 0.8

Growth: 5.3

Quality: 8.0

Yield: 5.0

Momentum: 9.5

Volatility: 2.7

1-Year Total Return ->

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Stock-Card
GoDaddy

A-Score: 4.6/10

Value: 3.1

Growth: 8.7

Quality: 6.8

Yield: 0.0

Momentum: 2.0

Volatility: 7.3

1-Year Total Return ->

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Stock-Card
Check Point

A-Score: 4.5/10

Value: 1.9

Growth: 6.1

Quality: 8.8

Yield: 0.0

Momentum: 4.0

Volatility: 6.0

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

9.91$

Current Price

9.91$

Potential

-0.00%

Expected Cash-Flows