Shares of StoneCo Ltd. (NASDAQ:STNE) gained 3.2% in yesterday’s extended trading session after reporting encouraging results for the second quarter. The company witnessed year-over-year growth in both adjusted earnings and revenues. The positive performance was driven by strength in the Financial Services unit, based on momentum in its micro-merchant, small, and medium business (MSMB).
Based in Brazil, StoneCo offers financial technology solutions. Its services are tailored to aid merchants and partners that conduct electronic commerce across in-store, online, and mobile platforms.
Q2 Details and Q3 Outlook
STNE reported Q2 adjusted net income of R$322 million, which increased 476.9% from R$55.8 million in the prior-year period. Similarly, revenue climbed 28.2% year-over-year to R$2.95 billion compared to the year-ago quarter.
In terms of other key metrics, total payment volume (TPV) in Q2 rose 7.4% year-over-year to R$97.4 billion. It should be noted that MSMB TPV came in at R$83.8 billion compared with R$69.9 billion in the prior year quarter.
StoneCo anticipates generating total revenues of more than R$3.08 million, reflecting a year-over-year growth of over 22.6%. Further, the company expects the MSMB TPV to be between R$87 billion and R$88 billion. The guided range suggests a 16.4% to 17.8% year-over-year jump.
Is StoneCo Stock a Good Buy?
Well, based on the ratings assigned by 11 Wall Street analysts, STNE stock is a Moderate Buy. It has received six Buy and five Hold recommendations in the past three months. Furthermore, these analysts’ average 12-month price target of $16.05 implies 20.3% upside potential from current levels. The stock has impressively surged 57.7% so far in 2023.
Investors seeking a more in-depth analysis of STNE stock could consider exploring TipRanks’ Smart Score tool, as it aids in predicting a stock’s future performance. StoneCo boasts a Smart Score of 9, indicating an anticipated outperformance of the broader market.
