RBC Capital has opened coverage on PicPay (NASDAQ:PICS), assigning the Brazilian payments platform an outperform rating and a price objective of $20.00. In its initiation note, the firm projects the company will deliver revenue growth at a 53% compound annual growth rate through fiscal year 2027.
RBC pointed to PicPay's competitive positioning against established Brazilian banks, saying the company can capture market share through a lower cost to serve and a stronger digital experience. The note also emphasized PicPay's ability to cross-sell financial products to its existing user base as a contributor to future expansion.
On valuation metrics, RBC reported that PicPay's shares trade at roughly 12 times calendar year 2026 price-to-earnings. With the market price at $15.71, the stock sits below InvestingPro's Fair Value estimate, which the initiation described as an indicator that PicPay may represent an undervalued opportunity within the fintech sector.
The firm underscored recent operating performance, citing 92% revenue growth over the last twelve months and a 93% gross profit margin as signals of operational efficiency. RBC described the resulting valuation as offering a compelling risk-reward profile if PicPay continues to execute on its growth strategy.
An InvestingPro note included with the coverage highlighted that PicPay was profitable over the last twelve months and identified the company as a notable participant in the Financial Services industry. That note also referenced the availability of eight additional ProTips and detailed financial metrics to help investors assess the company's trajectory ahead of its earnings report scheduled for February 24.
In a separate development, HSBC initiated coverage on PicPay with a buy rating and a $21.00 price target. HSBC's valuation was derived from a dividend discount model that applies a cost of equity of 15% and a growth rate of 8.0%. According to HSBC's calculation, the $21.00 target implies about 59% upside from current levels.
Both broker initiations underline a positive outlook from sell-side analysts based on the figures and models cited. Investors considering PicPay can use the valuation, growth projections, and margin data provided by these reports as inputs when evaluating the company's prospects.
Key takeaways
- RBC Capital initiated PicPay with an outperform rating and a $20.00 price target, projecting 53% revenue CAGR through fiscal 2027.
- HSBC initiated coverage with a buy rating and a $21.00 target using a dividend discount model with a 15% cost of equity and 8.0% growth rate, implying 59% upside from current levels.
- PicPay reported 92% revenue growth over the last twelve months and a 93% gross profit margin; the shares trade at about 12 times CY2026 P/E and at $15.71, below InvestingPro's Fair Value estimate.
Risks and uncertainties
- Execution risk - The valuation metrics and projected upside assume successful execution of PicPay's growth strategy; failure to execute could alter the risk-reward profile.
- Valuation sensitivity - Estimates such as the dividend discount model used by HSBC rely on inputs like cost of equity and growth rate; variations in those inputs would change the price target and implied upside.
- Market and sector exposure - As a Financial Services and fintech company, PicPay's performance is tied to consumer adoption and competitive dynamics in Brazil's financial sector, where incumbent banks and other digital players may affect market share gains.