Financials & FinTech research, Galliano’s Financials Research

Victor Galliano

Financials & FinTech research

Financials & FinTech, EM & Developed Markets

Galliano’s Financials Research

Galliano's Financials Research provides fundamental research in Emerging Markets financials, including FinTech, as well as financials in select Developed Markets.

The investment style applied is generally value oriented, although Growth At Reasonable Price (GARP) strategies can also be used where appropriate. 

Our investment research approach aim is often contrarian, looking to capitalise on overly sceptical or optimistic consensus views. In terms of valuation techniques, the focus is on PBV ratio to ROE, PE multiples and dividend yield, as well as the application of PEG ratios and, where appropriate, Sum of the Parts (SOTP) valuations.

Equity Bottom-Up

<ul>
<li>Nexi had been one of our buy picks for some time now, due to its shares’ fundamental value credentials and the group’s stabilisation of its EBITDA margin</li>
<li>A key challenge is de-leveraging the balance sheet, and Nexi failed to sell its non-core digital banking services division in 4Q 2025 which would have facilitated debt reduction</li>
<li>The role of Italy’s Cassa Deposito e Prestiti (CDP) in blocking the digital banking services division sale is worryingly due to national interests, and against those of Nexi minority shareholders</li>
</ul>


Nexi had been one of our buy picks for some time now, due to its shares’ fundamental value credentials and the group’s stabilisation of its EBITDA margin
A key challenge is de-leveraging the balance sheet, and Nexi failed to sell its non-core digital banking services division in 4Q 2025 which would have facilitated debt reduction
The role of Italy’s Cassa Deposito e Prestiti (CDP) in blocking the digital banking services division sale is worryingly due to national interests, and against those of Nexi minority shareholders


Nexi (BIT:NEXI) – Non-Core Disposal Headwinds, Downgrading the Shares to Neutral

Equity Capital Markets

<ul>
<li>Our initial PicPay report assumed a post-money IPO valuation of USD2.5bn; the disclosed price range implies an IPO valuation of USD2.07bn to USD2.53bn, with between USD365m and USD500m being raised</li>
<li>The key challenge we see for PicPay is credit quality; stage 3 loans to total loans have risen fast, despite secured loans accounting for 70%+ of the total</li>
<li>We believe that PicPay is more comparable to Banco Pan not Inter and certainly not Nubank; therefore, we see more appropriate IPO pricing at the bottom of the range (USD16)</li>
</ul>


Our initial PicPay report assumed a post-money IPO valuation of USD2.5bn; the disclosed price range implies an IPO valuation of USD2.07bn to USD2.53bn, with between USD365m and USD500m being raised
The key challenge we see for PicPay is credit quality; stage 3 loans to total loans have risen fast, despite secured loans accounting for 70%+ of the total
We believe that PicPay is more comparable to Banco Pan not Inter and certainly not Nubank; therefore, we see more appropriate IPO pricing at the bottom of the range (USD16)


PicPay Pre-IPO Revisited – Further Thoughts on Valuation

<ul>
<li>PicPay is a Brazilian fintech offering a range of digital banking and financial services including payments to consumer and small and medium business clients</li>
<li>No valuation range has been released yet for PicPay’s IPO, but press reports indicate a USD500m potential offering; we assume a post-money market capitalisation at IPO of USD2.5bn</li>
<li>PicPay is higher quality than Banco PAN, especially in terms of NPL ratio, but PicPay falls short, in terms of its operating metrics, versus Inter and well short of Nubank</li>
</ul>


PicPay is a Brazilian fintech offering a range of digital banking and financial services including payments to consumer and small and medium business clients
No valuation range has been released yet for PicPay’s IPO, but press reports indicate a USD500m potential offering; we assume a post-money market capitalisation at IPO of USD2.5bn
PicPay is higher quality than Banco PAN, especially in terms of NPL ratio, but PicPay falls short, in terms of its operating metrics, versus Inter and well short of Nubank


PicPay Pre-IPO Research – Initial Thoughts on Its Valuation Versus LatAm Fintechs

<ul>
<li>Our key picks for 1H 2026 are driven by fundamental valuations, margin and growth prospects; top of our buy list is Nexi, with PagSeguro in second place</li>
<li>Our key sell is Affirm; the increasingly competitive BNPL market is a potential “banana skin” for its premium growth forecasts, coupled with potentially worsening consumer credit delinquency</li>
<li>Klarna is one to watch in 1H 2026, but it is not there yet; the share price’s underwhelming performance post-IPO reflects the competitive BNPL market, especially in the US</li>
</ul>


Our key picks for 1H 2026 are driven by fundamental valuations, margin and growth prospects; top of our buy list is Nexi, with PagSeguro in second place
Our key sell is Affirm; the increasingly competitive BNPL market is a potential “banana skin” for its premium growth forecasts, coupled with potentially worsening consumer credit delinquency
Klarna is one to watch in 1H 2026, but it is not there yet; the share price’s underwhelming performance post-IPO reflects the competitive BNPL market, especially in the US


Payment Companies – Our 2026 High Conviction Ideas

<ul>
<li>Klarna’s IPO issue price of USD40 implies a market capitalisation of USD15.1bn and, according to financial press reports, the IPO was twenty-five times over-subscribed</li>
<li>The Klarna IPO valuation metrics, versus its peers, still serves to highlight Affirm’s very stretched valuation and we stand by our Affirm sell rating</li>
<li>On the positive side, we highlight PayPal as also the best value play of the major BNPL participants; we also like PagSeguro and Nexi</li>
</ul>


Klarna’s IPO issue price of USD40 implies a market capitalisation of USD15.1bn and, according to financial press reports, the IPO was twenty-five times over-subscribed
The Klarna IPO valuation metrics, versus its peers, still serves to highlight Affirm’s very stretched valuation and we stand by our Affirm sell rating
On the positive side, we highlight PayPal as also the best value play of the major BNPL participants; we also like PagSeguro and Nexi


Klarna IPO (KLAR US) – Premium Pricing Out of the Gate, Still a Threat to Affirm’s Current Valuation

Brazil

PagSeguro Digital Ltd. is a Brazilian financial technology company that provides digital payment and financial solutions primarily for consumers, individual entrepreneurs, micro-merchants, and small to medium-sized businesses. The company offers a range of products including point-of-sale (POS) devices, online payment tools, digital banking services via PagBank, and various credit and investment solutions. It was founded in 2006 and is headquartered in São Paulo, Brazil.

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PagSeguro Digital (PAGS US)

Nexi (BIT:NEXI) – Non-Core Disposal Headwinds, Downgrading the Shares to Neutral

Nexi's failure to sell its digital banking service arm hinders the de-leverage of its balance sheet, with the sale blocked by Italy's CDP for...

Victor Galliano

PicPay Pre-IPO Revisited – Further Thoughts on Valuation

PicPay's IPO valuation ranges from USD2.07bn to USD2.53bn, with credit quality as a key concern; we see Banco Pan as its key comparable, and...

Victor Galliano

PicPay Pre-IPO Research – Initial Thoughts on Its Valuation Versus LatAm Fintechs

We base Brazil fintech PicPay's initial IPO valuation on those of LatAm fintech peers. We see it as higher quality than Banco PAN but it lags...

Victor Galliano

Payment Companies – Our 2026 High Conviction Ideas

Top payment picks for 1H 2026: Buy Nexi, PagSeguro for deep value; Sell Affirm due to BNPL competition and credit risks; Keep an eye on Klarna's...

Victor Galliano

Klarna IPO (KLAR US) – Premium Pricing Out of the Gate, Still a Threat to Affirm’s Current Valuation

Klarna's IPO price shows strong demand, while Affirm's valuation remains stretched and it looks exposed to a de-rating. We see PayPal, PagSeguro,...

Victor Galliano

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Nexi (BIT:NEXI) – Non-Core Disposal Headwinds, Downgrading the Shares to Neutral

​Nexi's failure to sell its digital banking service arm hinders the de-leverage of its balance sheet, with the sale blocked by Italy's CDP for...

Victor Galliano

PicPay Pre-IPO Revisited – Further Thoughts on Valuation

​PicPay's IPO valuation ranges from USD2.07bn to USD2.53bn, with credit quality as a key concern; we see Banco Pan as its key comparable, and...

Victor Galliano

PicPay Pre-IPO Research – Initial Thoughts on Its Valuation Versus LatAm Fintechs

We base Brazil fintech PicPay's initial IPO valuation on those of LatAm fintech peers. We see it as higher quality than Banco PAN but it lags...

Victor Galliano

Payment Companies – Our 2026 High Conviction Ideas

​Top payment picks for 1H 2026: Buy Nexi, PagSeguro for deep value; Sell Affirm due to BNPL competition and credit risks; Keep an eye on Klarna's...

Victor Galliano

Klarna IPO (KLAR US) – Premium Pricing Out of the Gate, Still a Threat to Affirm’s Current Valuation

​Klarna's IPO price shows strong demand, while Affirm's valuation remains stretched and it looks exposed to a de-rating. We see PayPal, PagSeguro,...

Victor Galliano

Nexi's failure to sell its digital banking service arm hinders the de-leverage of its balance sheet, with the sale blocked by Italy's CDP for...

PicPay's IPO valuation ranges from USD2.07bn to USD2.53bn, with credit quality as a key concern; we see Banco Pan as its key comparable, and...

Top payment picks for 1H 2026: Buy Nexi, PagSeguro for deep value; Sell Affirm due to BNPL competition and credit risks; Keep an eye on Klarna's...

Klarna's IPO price shows strong demand, while Affirm's valuation remains stretched and it looks exposed to a de-rating. We see PayPal, PagSeguro,...