Financial Analysis: Betawave (OTCMKTS:BWAV) vs. PagSeguro Digital (NYSE:PAGS)

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

Volatility & Risk

PagSeguro Digital has a beta of 1.92, suggesting that its stock price is 92% more volatile than the S&P 500. Comparatively, Betawave has a beta of -7.39, suggesting that its stock price is 839% less volatile than the S&P 500.

Earnings & Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
PagSeguro Digital	$9.38 billion	0.22	$331.23 million	$1.21	5.29
Betawave	N/A	N/A	N/A	N/A	N/A

PagSeguro Digital has higher revenue and earnings than Betawave.

Institutional & Insider Ownership

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 company is poised for long-term growth.

Analyst Ratings

This is a summary of current ratings and recommmendations for PagSeguro Digital and Betawave, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
PagSeguro Digital	1	4	7	1	2.62
Betawave	0	0	0	0	0.00

PagSeguro Digital presently has a consensus price target of $14.00, suggesting a potential upside of 118.75%. Given PagSeguro Digital’s stronger consensus rating and higher probable upside, equities research analysts clearly believe PagSeguro Digital is more favorable than Betawave.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
PagSeguro Digital	11.12%	15.49%	3.49%
Betawave	N/A	N/A	N/A

Summary

PagSeguro Digital beats Betawave on 10 of the 10 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 Betawave

Betawave Corporation provides online advertising services for a portfolio of websites. It delivers advertising to audiences of highly-engaged users. The company has a network of websites in three online categories: immersive casual gaming, virtual world, and social play and entertainment. It specializes in helping brand marketers reach the attentive audiences on various Web sites through ad formats. It serves advertisers in various categories, including consumer packaged goods, entertainment, consumer electronics and software, and retail. The company's advertising in the publisher sites includes direct sales category comprising IAB graphical advertising and rich media/immersive advertising; and remnant inventory category, which are advertising inventory on a website that is not sold directly to an advertiser. It sells its inventory and marketing services through a sales and marketing organization in the United States. The company was formerly known as GoFish Corporation and changed its name to Betawave Corporation in January 2009. Betawave Corporation was incorporated in 2003 and is based in San Francisco, California.