PagSeguro Digital: The Market Is Pricing In Way Too Much Risk

PagSeguro Digital remains a Strong Buy, trading at a deep discount with significant re-rating potential as macro conditions improve.

PAGS's Q2 showed modest revenue and EPS growth, but robust credit portfolio expansion and continued share buybacks support long-term value.

Guidance for 2026 is unchanged but assumes a lower Selic rate; persistent high rates could prompt guidance cuts and near-term volatility.

Valuation implies an excessive discount rate, offering a substantial margin of safety despite macro and competitive risks.

PagSeguro Digital is "Built To Benefit From Brazil's Next Rate-Cutting Cycle." Despite a relatively weak quarter as This article was written by IWA Research.