PAGS
PagSeguro Digital Ltd.
$11.16
Platform & Compounding FCF
85%
Two-stage FCF DCF
Strong
·
Conviction
Undervalued
Trading 56.9% below fair value
You pay
$11.16
Bear
$25.87
Fair
$25.87
Bull
$29.39
Bear
$25.87
+131.9%
3% stage 1 growth, 11% discount
Fair
$25.87
+131.9%
3% stage 1 growth, 11% discount
Bull
$29.39
+163.3%
4% stage 1 growth, 11% discount
Adjust Assumptions
3.0%
11.0%
3.0%
Key Value Driver
FCF growth rate (3% base case)
Terminal Value % of EV
33%
Implied Market Multiple
9.2x
Market is pricing in (growth)
-1.7%
vs 3.0% base
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (24 analysts)
$10.70
Divergence from AlphaVal
142%
Summary
Using a two-stage FCF DCF with 3% growth decelerating over 15 years, discounted at 11%, the base-case intrinsic value is $25.87 per share.
Warnings
Wall Street's average price target is $10.70 (from 24 analysts). Our estimate is 142% above the consensus -- consider that gap carefully.
Financial statements were converted from BRL into USD using USDBRL at 0.2009 USD per BRL.
Key Risks
- P/E alone misleads — earnings depressed by growth investment
- Cyclical or commodity businesses may be misclassified as platforms
- Terminal value dominance suggests sensitivity to long-run assumptions