PagSeguro Digital Ltd. (PAGS) DCF Valuation & Fundamental Primer
PagSeguro Digital Ltd. (PAGS) currently trades at — with an enterprise value of $-218.81B. Our proprietary institutional model rates PagSeguro Digital Ltd. at 44/100 (Grade: C · Capital Intensive / Low Margin).
Institutional fundamental teardown of PagSeguro Digital Ltd. (PAGS) covering SEC 10-K/10-Q cash flow conversion, SBC dilution friction, and Reverse-DCF valuation hurdles.
PagSeguro Digital Ltd. (PAGS) 3-Scenario DCF Valuation Range
Stress-test PAGS's 5-year growth, target FCF margin, WACC, terminal methodology, and SBC/dilution friction in real time.
Split between 5-Year Explicit Cash Flows and Discounted Terminal Value
2D Institutional Valuation Sensitivity Heatmap
Implied share price & upside/downside spread across 25 valuation states (Current Price: —).
| WACC \ Terminal | 1.5% | 2.0% | 2.5% | 3.0% | 3.5% |
|---|---|---|---|---|---|
| 8.5% | $127.78 N/M | $144.83 N/M | $164.73 N/M | $188.24 N/M | $216.46 N/M |
| 9.3% | $100.18 N/M | $113.61 N/M | $129.04 N/M | $146.93 N/M | $167.94 N/M |
| 10.0% | $77.51 N/M | $88.31 N/M | $100.56 N/M | $114.55 N/M | $130.69 N/M |
| 10.8% | $58.58 N/M | $67.41 N/M | $77.31 N/M | $88.49 N/M | $101.21 N/M |
| 11.5% | $42.53 N/M | $49.86 N/M | $58.00 N/M | $67.09 N/M | $77.32 N/M |
Institutional Software Quality Scorecard (44/100 · Grade C)
Weak cash conversion, substantial dilution drag, or constrained financial flexibility.
Negative free cash flow; business consumes cash to sustain operations
Minimal dilution friction; management compensation aligned with shareholders
Sub-par gross margins; higher cost of delivery or hardware/services mix
Leveraged balance sheet coupled with cash burn; heightened refinancing risk
Core Investment Strengths & Moats
- Low dilution friction: SBC is only 1.0% of revenue
Key Operational & Dilution Risks
- Negative free cash flow burn of $-5.74B over trailing twelve months
- Lower software gross margins (47.9%), indicating higher hosting or service delivery drag
- Balance sheet vulnerability: Net debt of $39.71B while operating with cash burn
PagSeguro Digital Ltd. (PAGS) 5-Year Fundamental Forecast
| Statement Line Item | TTM Audited Base | TTM | Y1 | Y2 | Y3 | Y4 | Y5 |
|---|---|---|---|---|---|---|---|
| Revenue | $18.33B | $18.33B | $23.59B | $30.36B | $39.06B | $50.27B | $64.69B |
| Gross Profit | $8.79B | $8.79B | $11.31B | $14.56B | $18.73B | $24.10B | $31.02B |
| Operating Income (EBIT) | $5.96B | $5.96B | $7.67B | $9.87B | $12.70B | $16.34B | $21.02B |
| Stock-Based Compensation (SBC) | $178.7M | $177.8M | $228.8M | $294.5M | $378.9M | $487.6M | $627.4M |
| Unlevered Free Cash Flow (FCF) | $-5.74B | $-5.74B | $-7.38B | $-9.50B | $-12.22B | $-15.73B | $-20.24B |
| SBC-Adjusted True Cash Flow | $-5.92B | $-5.91B | $-7.61B | $-9.79B | $-12.60B | $-16.22B | $-20.87B |
Software & Cloud Services Peer Comparables & Rule of 40 Regression
Rule of 40 vs. EV / Revenue Multiple Regression
OLS Fit: EV/Rev = -30.2 + 0.82 × (Rule of 40) · R² = 79%Stocks below the gold regression line trade at a discount relative to their Rule of 40 compounding efficiency.
| Company | Ticker | Market Cap | TTM Revenue | Gross Margin | FCF Margin | Rule of 40 | SBC % Rev | EV / Rev |
|---|---|---|---|---|---|---|---|---|
| PagSeguro Digital Ltd. | PAGS | — | $18.33B | 48.0% | -31.3% | -2.6% | 1.0% | — |
| ServiceNow | NOW | $152.61B | $10.98B | 79.2% | 31.1% | 54.2% | 15.9% | 13.9× |
| Workday, Inc. | WDAY | $50.35B | $8.00B | 75.0% | 27.4% | 43.9% | 19.0% | 6.4× |
| Salesforce | CRM | $217.10B | $37.90B | 77.2% | 32.8% | 42.8% | 8.4% | 5.8× |
| Datadog | DDOG | $46.05B | $2.68B | 80.8% | 31.1% | 57.7% | 21.3% | 17.4× |
| Snowflake Inc. | SNOW | $71.79B | $3.63B | 66.5% | 25.2% | 57.7% | 40.8% | 20.0× |
| Hubspot | HUBS | $19.89B | $2.63B | 85.0% | 21.3% | 52.7% | 19.2% | 7.7× |
| Peer Cohort Median Benchmark (N=6) | 78.2% | 29.2% | 53.5% | 19.1% | 10.8× | |||
EV / Revenue Multiple Compression Stress Test
| Multiple Scenario | EV / Revenue | Implied Enterprise Value | Implied Equity Value | Implied Share Price | Delta vs Current |
|---|---|---|---|---|---|
| Current Multiple | 2.6× | $47.24B | $7.52B | $25.00 | 0.0% |
| -20% Multiple Compression | 2.1× | $37.79B | $0 | $0.00 | -20.0% |
| -35% Multiple Compression | 1.7× | $30.71B | $0 | $0.00 | -35.0% |
| Software Baseline Floor (5.0× EV/Rev) | 5.0× | $91.67B | $51.95B | $172.61 | +94.1% |
Frequently Asked Questions: PagSeguro Digital Ltd. (PAGS) Valuation
What is PagSeguro Digital Ltd. (PAGS)'s intrinsic DCF valuation and implied share price?
Based on audited SEC 10-K/10-Q filings and a 5-year 3-statement discounted cash flow (DCF) model, PagSeguro Digital Ltd. (PAGS) has a Base Case implied value of N/A per share (with a Bear Case of N/A and a Bull Case of N/A), compared to its current price of market price. The model discounts projected free cash flows at a 10.0% WACC and a 2.5% terminal growth rate.
What is PagSeguro Digital Ltd. (PAGS)'s Rule of 40 score and Free Cash Flow margin?
PagSeguro Digital Ltd. achieves a Rule of 40 score of -2.6%, combining a 28.7% revenue growth run-rate with a -31.3% TTM free cash flow margin on $18.33B in trailing twelve-month revenue. In the Software & Cloud Services peer cohort, the median Rule of 40 benchmark is 53.5%.
What revenue growth rate is priced into PAGS stock according to Reverse-DCF analysis?
At market price per share (Enterprise Value of N/A), our Reverse-DCF solver indicates the market is pricing in a 5-year implied revenue CAGR of 28.7%, compared to PagSeguro Digital Ltd.'s historical CAGR of 28.7%. Overall market expectations are rated as "Fairly Priced to Fundamentals".
How does PagSeguro Digital Ltd. compare to Software & Cloud Services software peers?
PagSeguro Digital Ltd. (PAGS) earns an institutional Software Quality Score of 44/100 (Grade C — Capital Intensive / Low Margin). Across its Software & Cloud Services peer group (NOW, WDAY, CRM, DDOG, SNOW), the cohort trades at a median EV/TTM Revenue multiple of 10.8× and a median gross margin of 78.2%.
How does Stock-Based Compensation (SBC) impact PagSeguro Digital Ltd. (PAGS)'s valuation?
PagSeguro Digital Ltd. recorded $178.7M in TTM stock-based compensation (1.0% of revenue). When treating SBC as a cash-equivalent compensation expense, PagSeguro Digital Ltd.'s SBC-adjusted free cash flow yield is evaluated directly in our 3-statement model, scoring 25/25 on our Shareholder Dilution Friction pillar.