Critical Contrast: PagSeguro Digital (NYSE:PAGS) vs. Nayax (NASDAQ:NYAX)

PagSeguro Digital (NYSE:PAGS) and Nayax (NASDAQ:NYAX) are both mid-cap business services companies, but which is the superior stock? We will contrast the two companies based on the strength of their earnings, profitability, analyst recommendations, dividends, risk, valuation and institutional ownership.

Earnings & Valuation

This table compares PagSeguro Digital and Nayax”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
PagSeguro Digital	$3.65 billion	0.73	$379.40 million	$1.36	7.04
Nayax	$400.43 million	6.34	$35.52 million	$0.79	87.72

PagSeguro Digital has higher revenue and earnings than Nayax. PagSeguro Digital is trading at a lower price-to-earnings ratio than Nayax, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

45.9% of PagSeguro Digital shares are held by institutional investors. Comparatively, 34.9% of Nayax shares are held by institutional investors. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Profitability

This table compares PagSeguro Digital and Nayax’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
PagSeguro Digital	10.40%	16.44%	3.29%
Nayax	6.95%	14.09%	4.30%

Analyst Recommendations

This is a breakdown of recent recommendations for PagSeguro Digital and Nayax, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
PagSeguro Digital	1	5	2	0	2.12
Nayax	1	4	3	0	2.25

PagSeguro Digital presently has a consensus price target of $11.10, suggesting a potential upside of 15.93%. Nayax has a consensus price target of $78.16, suggesting a potential upside of 12.78%. Given PagSeguro Digital’s higher possible upside, research analysts plainly believe PagSeguro Digital is more favorable than Nayax.

Risk and Volatility

PagSeguro Digital has a beta of 1.32, indicating that its share price is 32% more volatile than the S&P 500. Comparatively, Nayax has a beta of 0.47, indicating that its share price is 53% less volatile than the S&P 500.

Summary

PagSeguro Digital beats Nayax on 8 of the 13 factors compared between the two stocks.

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.

About Nayax

Nayax Ltd., a fintech company, operates system and payment platform for multiple retailers in the United States, Europe, the United Kingdom, Australia, Israel, and rest of the world. The company offers AMIT 3.0, a machine-to-machine vending telemetry solution; Nayax Core, a management and monitoring software for vending machines and other unattended machines; MoMa, a mobile app for unattended machine; Tigapo back-office software suite, a cloud-based platform; EV Core, a smart, cloud-based management platform; Retail Management Cloud, a comprehensive attended retail management platform; Loyalty and Marketing Suite, a consumer engagement marketing and loyalty platform; Monyx Wallet, a digital wallet app enabling cashless payments with mobile phones; Weezmo, a consumer engagement and marketing platform; and Tigapo app, a proprietary mobile app to help family entertainment center businesses. It provides electric vehicle charging stations; VPOS Touch, a credit card reader cashless payment device; VPOS Fusion, a cashless payment card reader; ONYX, a contactless card reader and telemetry device; NOVA 156, an electronic cash register; DOT, a smart QR and barcode reader; UNO Plus and UNO 8, which are EMV and FeliCa contactless readers; EMV SOM, a PCI-PTS ready contactless EMV reader module; Nova Market, a cashless micro market and self-checkout solution; NOVA 55, an a handheld smart point of sale (POS) device; NOVA 45, a handheld mini smart terminals for attended POS; and Retail One, a universal retail solution that integrates directly with SAP. The company sells its products directly, as well as through resellers and distributors. It serves various verticals, including vending machines, coffee machines, unattended checkout counters, self-service kiosks, ticketing machines, car wash stations, gaming machines, amusement rides, laundromats, and EV charging stations. Nayax Ltd. was incorporated in 2005 and is headquartered in Herzliya, Israel.