STNE - PagSeguro: Business Tailwind And Attractive Valuation

2024-04-08 07:54:23 ET

Summary

• PagSeguro has a disruptive business model focused on SMEs, which has led to systematic growth since 2009.
• In the macroeconomic scenario, Brazil has a tailwind as it is cutting interest rates. The interest rate cut cycle causes a reduction in financial expenses, due to lower funding cost.
• The company is trading at a discount compared to its peers, which seems like a great opportunity given the company's track record.

Investment Thesis

I recommend buying PagSeguro (NYSE: PAGS ) shares, which are trading at a discount to their peers, despite their disruptive business model. The company has strong growth prospects with its strategy of focusing on SMEs (especially MEIs)....

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