Paysafe (NYSE:PSFE) versus PagSeguro Digital (NYSE:PAGS) Critical Comparison
by Danessa Lincoln · The Markets DailyPaysafe (NYSE:PSFE – Get Free Report) and PagSeguro Digital (NYSE:PAGS – Get Free Report) are both business services companies, but which is the superior business? We will contrast the two businesses based on the strength of their earnings, dividends, profitability, institutional ownership, risk, analyst recommendations and valuation.
Profitability
This table compares Paysafe and PagSeguro Digital’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Paysafe | -11.44% | 11.32% | 1.66% |
| PagSeguro Digital | 10.40% | 16.44% | 3.29% |
Institutional & Insider Ownership
54.4% of Paysafe shares are held by institutional investors. Comparatively, 45.9% of PagSeguro Digital shares are held by institutional investors. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.
Earnings & Valuation
This table compares Paysafe and PagSeguro Digital”s gross revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Paysafe | $1.74 billion | 0.20 | -$182.51 million | ($3.53) | -1.92 |
| PagSeguro Digital | $20.57 billion | 0.12 | $379.40 million | $1.36 | 6.47 |
PagSeguro Digital has higher revenue and earnings than Paysafe. Paysafe is trading at a lower price-to-earnings ratio than PagSeguro Digital, indicating that it is currently the more affordable of the two stocks.
Volatility & Risk
Paysafe has a beta of 1.76, meaning that its share price is 76% more volatile than the S&P 500. Comparatively, PagSeguro Digital has a beta of 1.33, meaning that its share price is 33% more volatile than the S&P 500.
Analyst Recommendations
This is a summary of recent ratings and target prices for Paysafe and PagSeguro Digital, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Paysafe | 2 | 3 | 1 | 0 | 1.83 |
| PagSeguro Digital | 1 | 4 | 3 | 0 | 2.25 |
Paysafe presently has a consensus target price of $10.13, suggesting a potential upside of 49.36%. PagSeguro Digital has a consensus target price of $12.00, suggesting a potential upside of 36.44%. Given Paysafe’s higher probable upside, analysts plainly believe Paysafe is more favorable than PagSeguro Digital.
Summary
PagSeguro Digital beats Paysafe on 9 of the 13 factors compared between the two stocks.
About Paysafe
Paysafe Limited provides end-to-end payment solutions in the United States, Germany, the United Kingdom, and internationally. Its payments platform offers a range of payment solutions comprising credit and debit card processing, digital wallet, eCash, and real-time banking solutions for entertainment verticals, such as iGaming, including online betting related to sports, e-sports, fantasy sports, poker, and other casino games, as well as travel, streaming/video gaming, retail/hospitality, and digital assets. The company operates through two segments, Merchant Solutions and Digital Wallets. The Merchant Solutions segment offers PCI-compliant payment acceptance and transaction processing solutions for merchants and integrated service providers, including merchant acquiring, transaction processing, gateway solutions, fraud and risk management tools, data and analytics, point of sale systems, and merchant financing solutions, as well as comprehensive support services under the Paysafe and Petroleum Card Services brands. The Digital Wallets segment offers digital wallet solutions under the Skrill, NETELLER, paysafecard, and Paysafecash brands; and pay-by-bank solutions under the Rapid Transfer brand. It also provides eCash solutions under the paysafecard and Paysafecash brands; paysafecard prepaid Mastercard that can be linked to a digital paysafecard account and used to make purchases; Safetypay, a platform that enables eCommerce transactions; and PagoEfectivo, an alternative payment platform. The company is based in London, the United Kingdom.
About PagSeguro Digital
PagSeguro Digital Ltd., together with its subsidiaries, provides financial technology solutions and services for consumers, individual entrepreneurs, micro-merchants, and small and medium-sized companies in Brazil and internationally. The company's products and services include PagSeguro Ecosystem, a digital ecosystem that operates as a closed loop where its clients are able to address their primary day to day financial needs, including receiving and spending funds, and managing and growing their businesses; PagBank digital account, which offers payment and banking services through the PagBank mobile app, as well as centralizes various cash-in options, functionalities, services, and cash-out options in a single ecosystem; and PlugPag, a tool for medium-sized and larger merchants that enables them to connect their point of sale (POS) device directly to their enterprise resource planning software or sales automation system through Bluetooth. It also offers cash-in solutions; online and in-person payment tools; and online gaming and cross-border digital services, as well as issues prepaid, credit, and cash cards. In addition, the company provides functionalities, and value-added services and features, such as purchase protection mechanisms, antifraud platform, account and business management tools, POS app, i-Banking App, Super App, and e-commerce support and bill payment services; and PedeFácil, an order management and food delivery app. Further, it is involved in processing of back-office solutions, including sales reconciliation, and gateway solutions and services, as well as the capture of credit cards with acquirers and sub acquirers. The company was founded in 2006 and is headquartered in São Paulo, Brazil.