Reviewing PagSeguro Digital (NYSE:PAGS) & Akerna (NYSE:KERN)

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

Profitability

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

Net Margins Return on Equity Return on Assets
PagSeguro Digital 23.77% 19.33% 11.16%
Akerna N/A -66.88% -22.05%

Insider & Institutional Ownership

50.5% of PagSeguro Digital shares are owned by institutional investors. Comparatively, 3.0% of Akerna shares are owned by institutional investors. 31.8% of Akerna shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Valuation and Earnings

This table compares PagSeguro Digital and Akerna’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
PagSeguro Digital $1.14 billion 10.63 $248.78 million $0.88 41.97
Akerna $10.92 million 9.03 -$12.31 million N/A N/A

PagSeguro Digital has higher revenue and earnings than Akerna.

Analyst Recommendations

This is a summary of current ratings and target prices for PagSeguro Digital and Akerna, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
PagSeguro Digital 0 2 7 0 2.78
Akerna 0 0 1 0 3.00

PagSeguro Digital currently has a consensus target price of $44.63, indicating a potential upside of 20.84%. Akerna has a consensus target price of $18.00, indicating a potential upside of 100.00%. Given Akerna’s stronger consensus rating and higher probable upside, analysts clearly believe Akerna is more favorable than PagSeguro Digital.

Risk and Volatility

PagSeguro Digital has a beta of 0.36, suggesting that its stock price is 64% less volatile than the S&P 500. Comparatively, Akerna has a beta of 2.3, suggesting that its stock price is 130% more volatile than the S&P 500.

Summary

PagSeguro Digital beats Akerna on 8 of the 12 factors compared between the two stocks.

About PagSeguro Digital

PagSeguro Digital Ltd. provides financial technology solutions and services for micro-merchants, and small and medium-sized businesses in Brazil and internationally. The company's products and services include PagSeguro Ecosystem, an end-to-end 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; and Free PagSeguro digital account, which centralizes various cash-in options, functionalities, services, and cash-out options in a single ecosystem. It also offers online gaming and cross-border digital services. In addition, the company offers functionalities, and value-added services and features, such as purchase protection mechanisms, antifraud platform, account and business management tools, eWallet, and its (point of sale) POS 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. Additionally, the company engages in the in-person payment activities through POS devices; and issuance of prepaid cards to clients for spending or withdrawing account balances. It also operates an online platform that facilitates peer-to-peer lending. The company was founded in 2006 and is headquartered in São Paulo, Brazil. PagSeguro Digital Ltd. is a subsidiary of Universo Online S.A.

About Akerna

Akerna Corp. operates a technology company in the cannabis space. The company offers MJ Platform and Leaf Data Systems that provide clients and government entities with a central data management system for tracking regulated cannabis products. Akerna Corp. was founded in 2010 and is based in Denver, Colorado.

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