PagSeguro Digital (PAGS) Stock Analysis & Winston Score

PagSeguro Digital is a Brazilian financial technology company that helps small businesses and individual sellers accept payments. Its main products include card readers, digital wallets, and a full banking app called PagBank, which lets customers send money, pay bills, and earn interest on deposits. It operates almost entirely in Brazil and competes in the fast-growing market for digital financial services.

The company makes money by charging fees on each payment processed, earning interest on loans it makes to customers, and collecting fees on banking services through PagBank. With tens of millions of active users and a large base of small merchants, PagSeguro has built a sticky ecosystem where customers use multiple products at once, making it harder for them to switch. The key growth driver is expanding its banking and credit products to capture more revenue per customer, but rising competition from rivals like Nubank and Mercado Pago, along with Brazil's economic volatility, remain meaningful risks.

Winston Score History

Growth Profile

For growth stock investors

When traditional metrics don't capture the full picture, these are the signals growth stock investors use instead.

Revenue Growth

-0.4% YoY

YoY Growth Rate

Revenue declining

EPS Growth

+10.4% YoY

YoY Growth Rate

Steady EPS growth

Insider Activity

0.3%ownership

→ Flat

Insiders holding steady — not selling despite ability to

Cash Position

Cash flow positive

$1.6B cash & investments

Quarterly Free Cash Flow

↓ Burn rate worsening

Company generates more cash than it spends — no dilution risk from fundraising

Revenue declining

PagSeguro Digital's revenue is actually shrinking. In a growth stock, that removes the core investment thesis. The low Winston Score here may be warranted — unless there's a turnaround story.

The Winston Score above measures business quality today. Growth stocks often score lower because they invest in the future rather than maximising current profits. These metrics show what matters most for evaluating that future.

Score breakdown

Every number that matters to educated investors.

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Quality

Gross Margin

51.2%

Healthy — 51.2% gross margin

Operating Margin

37.3%

Excellent — 37.3% operating margin

ROCE

2.9%

Weak — 2.9% return on capital

ROIC between 0% and 5%. They earn a few cents back per dollar invested in the business.

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Growth

Sales YoY

+5.1%

Slow sales growth (5.1% YoY)

EPS YoY

+6.8%

Modest earnings growth (6.8% YoY)

Single-digit earnings growth — steady but not exciting.

EPS Consistency

6/8 quarters

Earnings grew in most of the last 8 quarters

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Cash Flow

Cash Conversion

88%

Modest — 88% of profit becomes cash

FCF Margin

1.8%

Thin free cash flow (1.8%)

FCF margin between 0% and 10%. Some cash from sales, but not a lot.

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Stability

Debt / Equity

3.18

Heavy debt load (3.18)

Interest Cover

1.46x

Dangerous — barely covers interest (1.5x)

Interest coverage between 1 and 3. Profits cover interest, but with little room to spare.

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Valuation

P/E Ratio (TTM)

1.3x

no trend

Attractive valuation — P/E 1.3

P/E under 10. The price tag is small relative to last year's profit.

P/E vs Forward

+0.0

GROWING

Earnings roughly flat

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Dividends

Dividend Yield

6.80%

no trend

Healthy income — 6.80% yield

Yield above 6% — often a flag the market is pricing in a cut.

Dividend Growth

N/A

no trend

Data not available

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