PagSeguro Digital Ltd. (PAGS) is a fintech company based in Brazil that provides payment solutions to micro-merchants and small- to medium-sized companies in Brazil and internationally. They offer digital solutions for receiving and spending funds, managing client accounts, credit and debit cards, bank transfers, and other financial services. Founded in 2006 and headquartered in Sao Paulo, Brazil, PagSeguro is valued at $4.17 billion by market cap.
Over the past year, PagSeguro stock has outperformed the market, rallying 38% and surging nearly 75% in the last six months. However, the stock is only up 1.7% year-to-date, having pulled back more than 15% from its 52-week high in late February.
Trading at 9.16 times forward earnings and 1.22 times sales, PagSeguro currently trades at a discount compared to other Brazil-based fintech companies like StoneCo (STNE) and Nu Holdings (NU).
Analysts are expecting PagSeguro to report EPS growth of 30.4% to $0.30 in its upcoming earnings report on May 23. For the full year, Wall Street predicts EPS growth of 18.4% to $1.29, with revenue expected to increase by 4.6% to $3.35 billion. PagSeguro has consistently surpassed analysts’ profit estimates in the past four quarters.
Wall Street has a bullish view on PagSeguro, with an average “Moderate Buy” rating from 13 analysts. Nine analysts rate it as a “Strong Buy,” while four call it a “Hold.” The mean price target for PagSeguro stock is $16.06, representing a premium of over 26% to the last Friday’s close.
Analysts from New Street Research and Evercore upgraded PagSeguro in March, raising the stock from “Hold” to “Buy.” Evercore analyst Sheriq Sumar noted that the stock still appeared cheap despite its recent gains and suggested that the current valuation did not fully reflect the interest rate outlook in Brazil.
For investors looking for affordable growth stocks, PagSeguro presents a fintech opportunity worth considering at its current levels.