PAGS

PAGS

PagBank / PagSeguro

Fintech TBV

★ Quality 36/100
Undervalued

Price today

$9.73

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charlieapp.co

What this business is made of

36qualityReturnsMoatBalance sheetPricing powerReinvestment

The business

The little card reader that turns the merchant into a banking customer.

PagBank/PagSeguro is a Brazilian fintech focused on small businesses and merchants. It charges for payment processing (TPV, total payment volume), POS (point-of-sale) subscriptions, and banking services on top of a R$50B credit base. The real engine today is banking cross-sell over the merchant base.

Physical distribution in Brazilian SMB that's hard to replicate without boots on the ground. The merchant base feeds low-cost deposits and credit, creating a modest flywheel. It's not a deep moat: it competes with Stone, Cielo, Mercado Pago, and Nubank.

Revenue history

$1.8B
2021
$2.9B
2022
$3.2B
2023
$3.0B
2024
$3.1B
2025
CAGR 5 años: +11%

From $1.8B to $3.1B in 4 years. The business grows steadily.

Where each $100 of sales goes

Revenue $3.0B · FY2024

Costs and operations$2.7B · 89%
Net profit$343M · 11%

Of every $100 in sales, $89 goes to costs and operations; $11 is left as net profit (11% margin).

Catalysts and risks

2026 guidance: EPS +9-13% with aggressive buybacks reducing share count.

Eventual SELIC cut from 14.5% decompresses net financial margin.

P/BV 1.07x with ROE 14.5% — natural re-rating if the market stops punishing Brazil.

⚠️

BRL/USD: every 5% of devaluation wipes out the operational gains in dollars.

⚠️

Competition from Nubank and Mercado Pago erodes pricing in payments and banking.

⚠️

Credit risk in the R$50B portfolio if Brazil enters a recession with high SELIC.

Charlie's note

At 1.07x book with ROE of 14.5%, you get paid to wait. The problem is that waiting in Brazil is expensive in dollars — DCA and patience, not a concentrated position.

Analysis · May 2026

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