PagSeguro Analyst Lowers Estimates After Re-evaluating Macro & Industry Drivers

KeyBanc analyst Josh Beck remained Sectorweight on PagSeguro Digital Ltd PAGS.
Beck updated CY23 estimates for PAGS as the analyst further evaluated macroeconomic trends and company-specific drivers.
Beck took his TPV estimate lower primarily on headwinds related to consumer spending versus CY22.
Active merchants are taken lower due to continued net churn relating to the micro-merchant base, though they have minimal impact on the analyst's TPV revision.
Beck's revenue estimate moves lower as a result of TPV changes.
The analyst also took financial expenses higher to reflect the higher rate environment better.
Lower net income comes as a result of the above estimate changes.
Beck's CY22 estimates were essentially unchanged.
PagSeguro operates in the desirable Brazilian market, which is ~30% penetrated.
With a brand boost from parent UOL, PagSeguro has crafted a disruptive model and added over ~5 million active merchants to its platform.
The narrative around the consumer-focused PagBank digital account could develop similarly to other successful FinApps like Block, Inc SQ Cash App or PayPal Holdings, Inc PYPL Venmo.
The PagBank FinApp meets the needs of ~90 million underserved consumers in Brazil, and early data suggests a strong PMF with a top 10 financial service app store ranking despite a launch.
While remaining constructive on PagBank's potential, the analyst recommends Sector Weight positions looking for increased visibility into scaling efforts.
Price Action: PAGS shares traded higher by 1.1% at $7.78 on the last check Monday.
Photo Via Company

Market News and Data brought to you by Benzinga APIs

Comments

Analyst Calendar

Popular Channels

Tools & Features

Partners & Contributors

About Benzinga