PagSeguro Digital Ltd. Class A Common Shares (PAGS)

FairStock Score: 76/100 — HIGH CONVICTION

Key Financials

AI Analysis

AI-generated, general educational analysis — not personal investment advice.

As a Buffett/Graham investor, I start with the business: PagSeguro sells payments and digital banking to Brazilian merchants and consumers. The latest supplied quarter, fiscal Q2 2026, shows revenue of $5.1B and net income of $549.0M, a 10.81% margin. That is a real, profitable enterprise, not a story stock. At the 2026-10-13 close of $10.99, the FairStock-calculated P/E is 7.53 and P/B is 1.03. A Graham Number of $42.30 implies a 74.02% margin of safety, and the 12.10% dividend yield is striking. TTM free cash flow of $3.9B against a $2.9B market cap gives a 135.5% FCF yield, but numbers that high usually need checking for working-capital or one-time effects. Financial health is mixed: debt/equity is low at 0.12 and ROE is 14.54%, yet ROCE is only 6.36%, the Piotroski F-Score is 6/9, and the Altman Z-Score of 0.77 flags distress risk under that model. Growth is also slow: revenue growth of 0.43% and profit growth of 2.23% make the PEG of 3.38 unappealing. The Lynch category is none because only 0 years of filed results exist, needing 3. So I see a cheap-looking but complicated financial-infrastructure company. The price is undemanding if cash flow and margins persist; the moat is not clearly wide, and the low Altman score keeps me cautious. I would demand more consistency before calling it a classic value opportunity.

In plain English: PagSeguro provides payment and digital banking services, largely in Brazil, for small merchants and consumers. The business is profitable and generates a lot of cash relative to its size, though growth has been slow and some risk measures look weak. At $10.99 on 2026-10-13, the shares look cheap against earnings and book value, but the very high dividend yield may be hard to rely on.

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Data as of 2026-10-13 close · note generated 2026-10-15 · model deepseek-flash

Fundamentals from company filings and market-data providers; prices are end-of-day, not real-time. AI-generated analysis is general and educational — not personal investment advice. Scoring methodology · Score test · Disclaimer