Paysafe (NYSE:PSFE) and PagSeguro Digital (NYSE:PAGS) Critical Contrast

Paysafe (NYSE:PSFE) and PagSeguro Digital (NYSE:PAGS) are both business services companies, but which is the better stock? We will compare the two businesses based on the strength of their institutional ownership, analyst recommendations, profitability, earnings, valuation, risk and dividends.

Earnings and Valuation

This table compares Paysafe and PagSeguro Digital”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Paysafe	$1.74 billion	0.22	-$182.51 million	($3.53)	-2.07
PagSeguro Digital	$3.65 billion	0.69	$379.40 million	$1.36	6.66

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.

Risk & Volatility

Paysafe has a beta of 1.76, indicating that its share price is 76% more volatile than the S&P 500. Comparatively, PagSeguro Digital has a beta of 1.33, indicating that its share price is 33% more volatile than the S&P 500.

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 and Insider Ownership

54.4% of Paysafe shares are owned by institutional investors. Comparatively, 45.9% of PagSeguro Digital shares are owned by institutional investors. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Paysafe and PagSeguro Digital, as provided by MarketBeat.com.

	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 currently has a consensus target price of $10.13, indicating a potential upside of 38.30%. PagSeguro Digital has a consensus target price of $12.00, indicating a potential upside of 32.39%. Given Paysafe’s higher probable upside, research analysts plainly believe Paysafe is more favorable than PagSeguro Digital.

Summary

PagSeguro Digital beats Paysafe on 10 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.