The case for PagBank(NYSE:PAGS)

PagBank(NYSE:PAGS) is a Fintech company focused on consumers , entrepreneurs and merchants varying in size from micro merchants to medium sized companies in brazil.
PagBank is the only Fintech company in brazil offering a full ecosystem , composed of both individual digital banking services and merchant acquiring, facilitating both consumers and retailers.
The company was founded in 2006 and became publicly traded on the NYSE at 2018.
36.8 percent of the company is privately owned by UOL and 63 is publicly traded with a 3.07B market cap.
The UOL Group CEO and Principal Executive Officer of PagBank Ricardo Dutra,is the former PagBank CEO (2016-2022) is a part of the UOL Group for 26 years and is a MBA.
The PagBank Ceo
Alexandre Magnai is the CEO of Pagbank since 2022 and was in the organization since 2015, before that, he spent 15 years at Mastercard leading their latin american regional new business development and retailer issuers initiatives.
PagBank is the second largest neo bank in brazil,with its client base growing quintuple-fold in the last 4 years,its credit portfolio growing sevenfold,and total deposits growing tenfold.
Its payment platform grew from 1 to 11 percent market share in the last 7 years,with 354 R$ Billion TPV in 2022.
In Brazil, only 55% of population 15+ use credit cards, in comparison to Countries like the US,UK and canada with 88% 93% and 97%,therefore the room for growth is very large.
Pagbank shows consistent growth,with 40% y/y outperforming the industry’s 25%, with e commerce being only 15% of total retail in brazil and PCE expected to reach 70% in 2025, PagBank growth potential is further solidified.
Since Lula was elected in brazil (January first) brazil 10 Year T Bill Interest Rate went down 13%,inflation rate dropped below 4% for the first time since october 2020 and the brazilian Real went up 10% against the dollar, if the economy continues to go along this trend, brazil spending power will increase and as a result the tpv and revenue of PagBank.
The newly presented 300 Billion $R PAC initiative is planned to create affordable housing and to advance the economy,and while the full bill wasn't unveiled yet and corruption is a viable concern, the initiative could very well help the company to grow .
Comparing the key financial ratios of PagBank, to 3 similar companies : Nu Bank(NU),Paypal(PYPL) and Block Inc.(SQ),PagBank has the lowest forward p/e,p/s, p/b, and debt to equity, in addition , it has the second largest net profit margin and largest operational margin.
The main risk factor in the company is its location,brazil is notoriously corrupt and the current president was involved in corruption scandals before, if brazil economy goes down so does PagBank.PagBank(NYSE:PAGS) is a Fintech company focused on consumers , entrepreneurs and merchants varying in size from micro merchants to medium sized companies in brazil.
PagBank is the only Fintech company in brazil offering a full ecosystem , composed of both individual digital banking services and merchant acquiring, facilitating both consumers and retailers.
The company was founded in 2006 and became publicly traded on the NYSE at 2018.
36.8 percent of the company is privately owned by UOL and 63 is publicly traded with a 3.07B market cap.
The UOL Group CEO and Principal Executive Officer of PagBank Ricardo Dutra,is the former PagBank CEO (2016-2022) is a part of the UOL Group for 26 years and is a MBA.
The PagBank Ceo
Alexandre Magnai is the CEO of Pagbank since 2022 and was in the organization since 2015, before that, he spent 15 years at Mastercard leading their latin american regional new business development and retailer issuers initiatives.
PagBank is the second largest neo bank in brazil,with its client base growing quintuple-fold in the last 4 years,its credit portfolio growing sevenfold,and total deposits growing tenfold.
Its payment platform grew from 1 to 11 percent market share in the last 7 years,with 354 R$ Billion TPV in 2022.
In Brazil, only 55% of population 15+ use credit cards, in comparison to Countries like the US,UK and canada with 88% 93% and 97%,therefore the room for growth is very large.
Pagbank shows consistent growth,with 40% y/y outperforming the industry’s 25%, with e commerce being only 15% of total retail in brazil and PCE expected to reach 70% in 2025, PagBank growth potential is further solidified.
Since Lula was elected in brazil (January first) brazil 10 Year T Bill Interest Rate went down 13%,inflation rate dropped below 4% for the first time since october 2020 and the brazilian Real went up 10% against the dollar, if the economy continues to go along this trend, brazil spending power will increase and as a result the tpv and revenue of PagBank.
The newly presented 300 Billion $R PAC initiative is planned to create affordable housing and to advance the economy,and while the full bill wasn't unveiled yet and corruption is a viable concern, the initiative could very well help the company to grow .
Comparing the key financial ratios of PagBank, to 3 similar companies : Nu Bank(NU),Paypal(PYPL) and Block Inc.(SQ),PagBank has the lowest forward p/e,p/s, p/b, and debt to equity, in addition , it has the second largest net profit margin and largest operational margin.
The main risk factor in the company is its location,brazil is notoriously corrupt and the current president was involved in corruption scandals before, if brazil economy goes down so does PagBank.