By Brazil Stock Guide – PicPay (PICS) is entering its most important phase since its IPO: monetizing the customer base it built over the past several years. For BTG Pactual, the company has moved beyond the growth cycle driven by cashback, marketing and fast user acquisition, and is now entering a stage in which it may turn scale into recurring profit.
The bank initiated coverage of PicPay, controlled by J&F, the holding company owned by the Batista family, with a buy rating and a $20 price target, about 70% above the $11.60 reference price used in the report. The stock has fallen about 40% since its U.S. IPO in January, when the company raised approximately $400 million.
The report was signed by BTG analysts Eduardo Rosman, Ricardo Buchpiguel and Antonio Pascale. Their thesis is that the selloff has made the stock inexpensive for a company that is beginning to show stronger earnings momentum. BTG estimates that PicPay trades at 8 times expected 2026 earnings and 4.3 times 2027 earnings.
PicPay’s main asset is its customer base. The company has 67 million clients and 42.7 million active users. Of that total, around 15 million already use the platform as their primary account. The opportunity now is to sell more financial products to these customers, especially credit, cards, insurance and other services inside the app.
Credit at the center
Expected growth depends mainly on credit. PicPay still has a small share in the markets where it operates: about 1% in credit cards, 1.8% in personal loans and 3.8% in private payroll loans. For BTG, that leaves room to increase revenue per customer. Today, the company captures about 5% of its users’ potential wallet in credit products. Its target is to reach 10% to 15% over the coming years.
The model resembles part of the strategy used by Nubank. PicPay starts with smaller credit limits, monitors customer behavior and increases exposure over time. The difference is that PicPay still has a shorter credit track record on its balance sheet and must prove that it can grow without causing too much deterioration in asset quality, BTG’s analysts said.
Profit on the rise
Recent numbers support the turnaround thesis. PicPay’s total revenue reached R$10.3 billion in 2025, up 84.5%. Adjusted net income was around R$502 million, almost double the previous year.
The gross loan portfolio reached R$24.1 billion, up 127.7%, while deposits rose to R$28.7 billion. The cost-to-income ratio fell to 53.2%, a sign of improving operating leverage.
BTG also sees potential upside from the acquisition of KOVR, an insurance company that is still awaiting regulatory approvals. PicPay agreed to pay around R$620 million for 100% of the company. The deal could expand the insurance offering inside the app and improve monetization of the customer base.
Risks ahead
BTG’s positive recommendation comes with a warning. The biggest risk is the speed of credit expansion. PicPay began retaining relevant credit risk on its own balance sheet only a few years ago, after incorporating Banco Original’s retail operations, and still needs to go through tougher cycles to validate its models.
The non-performing loan ratio over 90 days reached 7.2% in 2025. Because most of PicPay’s customers are lower-income individuals, the company is more exposed to high interest rates, household indebtedness and a weaker labor market.
Another point of attention is the product that allows users to finance Pix transactions with third-party credit cards. According to BTG, it accounted for about 10% of revenue and 15% of gross profit in 2025. Restrictions from card issuers or regulatory changes could reduce that contribution.
Still, BTG sees an attractive risk-reward balance. For the analysts, PicPay has already built scale. The test now is whether it can turn that base into recurring profit without losing control of asset quality.
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