Getnet Adquirência e Serviços para Meios de Pagamento (BOVESPA:GETT3) - Share price, News & Analysis

Q: What is the Fair Price of GETT3 when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

GETT3 (R$2.11) is trading below our estimate of [[fair value]] (R$2.4)

GETT3 fundamental analysis
Snowflake Score
Valuation	5/6
Future Growth	3/6
Past Performance	3/6
Financial Health	4/6
Dividends	2/6

GETT3 Stock Overview

Getnet Adquirência e Serviços Para Meios de Pagamento S.A.

Rewards

Trading at 11.9% below our estimate of its fair value

Earnings are forecast to grow 12.37% per year

Earnings grew by 120.6% over the past year

Risk Analysis

Debt is not well covered by operating cash flow

High level of non-cash earnings

Dividend of 7.21% is not well covered by earnings

Volatile share price over the past 3 months

Getnet Adquirência e Serviços para Meios de Pagamento Competitors

Cielo

BOVESPA:CIEL3

R$10.6b

CSU Cardsystem

BOVESPA:CARD3

R$520.1m

Sinqia

BOVESPA:SQIA3

R$1.4b

TOTVS

BOVESPA:TOTS3

R$14.3b

Price History & Performance

Summary of all time highs, changes and price drops for Getnet Adquirência e Serviços para Meios de Pagamento
Historical stock prices
Current Share Price	R$2.11
52 Week High	R$12.53
52 Week Low	R$1.52
Beta	0
1 Month Change	-7.46%
3 Month Change	17.88%
1 Year Change	n/a
3 Year Change	n/a
5 Year Change	n/a
Change since IPO	-60.93%

Shareholder Returns

	GETT3	BR IT	BR Market
7D	-3.7%	-0.4%	-0.03%
1Y	n/a	-48.9%	-30.1%

Return vs Industry: Insufficient data to determine how GETT3 performed against the BR IT industry.

Return vs Market: Insufficient data to determine how GETT3 performed against the BR Market.

Price Volatility

Is GETT3's price volatile compared to industry and market?
GETT3 volatility
GETT3 Average Weekly Movement	8.2%
IT Industry Average Movement	8.2%
Market Average Movement	5.8%
10% most volatile stocks in BR Market	9.2%
10% least volatile stocks in BR Market	2.8%

Stable Share Price: GETT3 is more volatile than 75% of BR stocks over the past 3 months, typically moving +/- 8% a week.

Volatility Over Time: GETT3's weekly volatility (8%) has been stable over the past year, but is still higher than 75% of BR stocks.

About the Company

Founded	Employees	CEO	Website
2003	1,280	Cassio Schmitt	https://ri.getnet.com.br

Getnet Adquirência e Serviços Para Meios de Pagamento S.A. operates in the acquiring and services market for means of payment regulated by the Council National Monetary Council and the Central Bank of Brazil. The company engages in the provision of accreditation services for retailer and service providers establishments to accept credit and debit cards; capturing, transmission, and processing of data and information; and installation, uninstallation, monitoring, supply, maintenance, and leasing of equipment used in transaction capture networks, such as point-of-sales devices, as well as acts as a distributor of telecommunication operators for the commercialization of telephony and data recharge digital credits. It is also involved in the management of payments and receipts made to establishments accredited to its network; development and selling or licensing of software; selling or distributing products and services from entities that provide registry information; provision of technical, commercial, and logistic infrastructure services for the business related to the receipt of bills from dealers, banks, and other collection documents; and issuing electronic currency.

Getnet Adquirência e Serviços para Meios de Pagamento Fundamentals Summary

How do Getnet Adquirência e Serviços para Meios de Pagamento's earnings and revenue compare to its market cap?
GETT3 fundamental statistics
Market Cap	R$3.96b
Earnings (TTM)	R$512.90m
Revenue (TTM)	R$3.07b

7.7x

P/E Ratio

1.3x

P/S Ratio

Is GETT3 overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
GETT3 income statement (TTM)
Revenue	R$3.07b
Cost of Revenue	R$1.86b
Gross Profit	R$1.21b
Other Expenses	R$693.77m
Earnings	R$512.90m

Last Reported Earnings

Mar 31, 2022

Next Earnings Date

n/a

Earnings per share (EPS)	0.27
Gross Margin	39.31%
Net Profit Margin	16.71%
Debt/Equity Ratio	67.4%

How did GETT3 perform over the long term?

See historical performance and comparison

Dividends

7.2%

Current Dividend Yield

55%

Payout Ratio

We’ve recently updated our valuation analysis.

Valuation

Is GETT3 undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

5/6

Valuation Score 5/6

Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
PEG Ratio

Key Valuation Metric

Which metric is best to use when looking at relative valuation for GETT3?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for GETT3. This is calculated by dividing GETT3's market cap by their current preferred multiple.
What is GETT3's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	R$3.96b

GETT3 key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	1.8x
Enterprise Value/EBITDA	5.5x
PEG Ratio	0.6x

Price to Earnings Ratio vs Peers

How does GETT3's PE Ratio compare to its peers?

GETT3 PE Ratio vs Peers

The above table shows the PE ratio for GETT3 vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	26.8x
CIEL3 Cielo	11.5x	10.9%	R$10.6b
CARD3 CSU Cardsystem	8.2x	n/a	R$520.1m
SQIA3 Sinqia	48.4x	38.4%	R$1.4b
TOTS3 TOTVS	39x	26.8%	R$14.3b
GETT3 Getnet Adquirência e Serviços para Meios de Pagamento	7.7x	12.4%	R$4.0b

Forward PE

Price-To-Earnings vs Peers: GETT3 is good value based on its Price-To-Earnings Ratio (7.7x) compared to the peer average (26.8x).

Price to Earnings Ratio vs Industry

How does GETT3's PE Ratio compare vs other companies in the Global IT Industry?

Price-To-Earnings vs Industry: GETT3 is good value based on its Price-To-Earnings Ratio (7.7x) compared to the South American IT industry average (10.1x)

Price to Earnings Ratio vs Fair Ratio

What is GETT3's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

GETT3 PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	7.7x
Fair PE Ratio	18.6x

Price-To-Earnings vs Fair Ratio: GETT3 is good value based on its Price-To-Earnings Ratio (7.7x) compared to the estimated Fair Price-To-Earnings Ratio (18.6x).

Share Price vs Fair Value

What is the Fair Price of GETT3 when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: GETT3 (R$2.11) is trading below our estimate of fair value (R$2.4)

Significantly Below Fair Value: GETT3 is trading below fair value, but not by a significant amount.

Price to Earnings Growth Ratio

PEG Ratio: GETT3 is good value based on its PEG Ratio (0.6x)

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Future Growth

How is Getnet Adquirência e Serviços para Meios de Pagamento forecast to perform in the next 1 to 3 years based on estimates from 3 analysts?

Future Growth Score

3/6

Future Growth Score 3/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

12.4%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: GETT3's forecast earnings growth (12.4% per year) is above the savings rate (9.2%).

Earnings vs Market: GETT3's earnings (12.4% per year) are forecast to grow faster than the BR market (6.9% per year).

High Growth Earnings: GETT3's earnings are forecast to grow, but not significantly.

Revenue vs Market: GETT3's revenue (6.8% per year) is forecast to grow faster than the BR market (5.6% per year).

High Growth Revenue: GETT3's revenue (6.8% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: Insufficient data to determine if GETT3's Return on Equity is forecast to be high in 3 years time

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Past Performance

How has Getnet Adquirência e Serviços para Meios de Pagamento performed over the past 5 years?

Past Performance Score

3/6

Past Performance Score 3/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

-10.5%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: GETT3 has a high level of non-cash earnings.

Growing Profit Margin: GETT3's current net profit margins (16.7%) are higher than last year (10.1%).

Past Earnings Growth Analysis

Earnings Trend: GETT3's earnings have declined by 10.5% per year over the past 5 years.

Accelerating Growth: GETT3's earnings growth over the past year (120.6%) exceeds its 5-year average (-10.5% per year).

Earnings vs Industry: GETT3 earnings growth over the past year (120.6%) exceeded the IT industry 80.8%.

Return on Equity

High ROE: GETT3's Return on Equity (15%) is considered low.

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Financial Health

How is Getnet Adquirência e Serviços para Meios de Pagamento's financial position?

Financial Health Score

4/6

Financial Health Score 4/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: GETT3's short term assets (R$54.5B) exceed its short term liabilities (R$53.0B).

Long Term Liabilities: GETT3's short term assets (R$54.5B) exceed its long term liabilities (R$93.1M).

Debt to Equity History and Analysis

Debt Level: GETT3's net debt to equity ratio (43.5%) is considered high.

Reducing Debt: GETT3's debt to equity ratio has reduced from 116.3% to 67.4% over the past 5 years.

Debt Coverage: GETT3's operating cash flow is negative, therefore debt is not well covered.

Interest Coverage: GETT3's interest payments on its debt are well covered by EBIT (6.4x coverage).

Balance Sheet

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Dividend

What is Getnet Adquirência e Serviços para Meios de Pagamento current dividend yield, its reliability and sustainability?

Dividend Score

2/6

Dividend Score 2/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Future Dividend Coverage

7.21%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: GETT3's dividend (7.21%) is higher than the bottom 25% of dividend payers in the BR market (1.77%).

High Dividend: GETT3's dividend (7.21%) is low compared to the top 25% of dividend payers in the BR market (7.96%).

Stability and Growth of Payments

Stable Dividend: Too early to tell whether GETT3's dividend payments have been stable as they only just started paying a dividend.

Growing Dividend: Too early to tell if GETT3's dividend payments are increasing as they only just started paying a dividend.

Earnings Payout to Shareholders

Earnings Coverage: With its reasonable payout ratio (55.4%), GETT3's dividend payments are covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: GETT3 is paying a dividend but the company has no free cash flows.

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Management

How experienced are the management team and are they aligned to shareholders interests?

1.8yrs

Average management tenure

CEO

Cassio Schmitt (51 yo)

0.25

Tenure

Mr. Cassio Schmitt serves as a Director of Credit Recovery Business, Officer and Member of the Board of Executive Officers at Banco Santander (Brasil) S.A. He joined Banco Santander Brasil in 2004. Mr. Sch...

Leadership Team

Experienced Management: GETT3's management team is not considered experienced ( 1.8 years average tenure), which suggests a new team.

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.

Ownership Breakdown

Dilution of Shares: GETT3 only recently listed within the past 12 months.

Data	Last Updated (UTC time)
Company Analysis	2022/07/03 00:00
End of Day Share Price	2022/07/01 00:00
Earnings	2022/03/31
Annual Earnings	2021/12/31