PagSeguro Stock Crashes: Here’s Why Investors Are Panicking

Brazil’s fintech darling just got a brutal reality check.

The bloodbath explained: PagSeguro shares nosedived after Q2 earnings revealed growth slowing faster than a crypto bull market in a bear trap. Processing volumes missed estimates—again—while competition from Mercado Pago and Pix squeezed margins like a DeFi liquidation.

Wall Street’s verdict: Analysts slashed price targets faster than a Bitcoin miner powering down. JP Morgan called it "a wake-up call for LATAM fintech valuations" (translation: the free money party’s over).

The kicker? Management’s "hypergrowth" roadmap now looks as credible as a shitcoin whitepaper. They’re betting big on offline payments—because nothing says innovation like chasing Square’s 2015 playbook.

Memo to bulls: When your moat evaporates faster than stablecoin reserves, maybe it’s time to HODL… the ‘sell’ button.

Image source: Getty Images.

PagSeguro Q2 earnings

According to the press release, PagBank grew its revenue 18% year over year, to 5.1 billion reals ($940 million), not counting foreign exchange rates, which is a great way to start off. Profits increased only 7% year over year, however, rising to 537 million reals ($98.7 million).

Deposits grew by 9% in local currency, and the company's loan portfolio grew by 11%. In a tough economy, PagBank purposely grew conservatively, expanding "low-risk, high-engagement products" in particular by 34%.

Commenting on the quarter, CEO Artur Schunck admitted the company is operating "in a challenging economic environment," but insisted the company has "grown profitably" in Q2, and is "on the right path" to continue doing so.

Is PagSeguro stock a sell?

Turning to S&P Global Market Intelligence for reliable data on this difficult to value bank, we see that PagSeguro has a $2.8 billion market capitalization, and earned $405 million in profit over the last 12 months. That makes for a P/E ratio of only about 6.9, which seems cheap to me in light of the deposits and loan growth -- maybe really cheap if the loans are conservatively made.

Throw in a modest 1.5% dividend for good measure, and PagSeguro looks like a buy to me -- not a sell.