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StoneX Group (SNEX)
NASDAQ:SNEX

StoneX Group (SNEX) AI Stock Analysis

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StoneX Group

(NASDAQ:SNEX)

Rating:71Outperform
Price Target:
$97.00
▲(15.75%Upside)
StoneX Group exhibits strong revenue growth and strategic expansions, such as the merger with R.J. O'Brien, that bolster its market position. Technical indicators suggest stable momentum, while valuation remains reasonable. However, liquidity issues and high leverage present risks that need addressing for long-term stability.
Positive Factors
Earnings Growth
EPS growth accelerated to 29% as elevated volatility, a key driver of the business, more than offset building interest rate headwinds.
Market Positioning
StoneX announced an agreement to acquire R.J. O’Brien, which would create the largest nonbank futures commission merchant in the industry.
Revenue Synergies
R.J. O'Brien has a strong presence in the introducing broker space, which is expected to unlock new revenue synergies for Stonex Group.
Strategic Acquisitions
The acquisition of R.J. O'Brien is expected to add scale and enhance Stonex Group's capabilities in interest rate hedging.
Negative Factors
Financial Leverage
The acquisition's funding with a combination of debt and equity may lead to increased financial leverage for Stonex Group.
Return on Equity
Declining interest rates should be a headwind to ROE over the next few years.

StoneX Group (SNEX) vs. SPDR S&P 500 ETF (SPY)

StoneX Group Business Overview & Revenue Model

Company DescriptionStoneX Group Inc. (SNEX) is a financial services organization that operates globally, providing a comprehensive range of services across various sectors including institutional trading, commercial hedging, retail trading, and clearing and execution services. The company serves a diverse client base, including corporations, financial institutions, and individual traders, leveraging its capabilities in risk management, market access, and financial intelligence to deliver tailored solutions.
How the Company Makes MoneyStoneX Group makes money through a diversified revenue model that includes trading commissions, fees for clearing and execution services, and interest earned on client balances. The company facilitates trading in commodities, securities, and foreign exchange markets, earning commissions on each transaction. Additionally, StoneX provides risk management and advisory services, generating fees for its expertise in helping clients hedge against market volatility. The firm's clearing and execution services involve acting as an intermediary in trades, for which it charges fees. Partnerships with financial institutions and corporations expand its reach and enhance its service offerings, contributing to its earnings. Furthermore, interest income from client balances held in various accounts adds another layer to its revenue streams.

StoneX Group Earnings Call Summary

Earnings Call Date:May 07, 2025
(Q2-2025)
|
% Change Since: -10.99%|
Next Earnings Date:Aug 07, 2025
Earnings Call Sentiment Positive
The earnings call highlighted strong financial performance with significant growth in net income and operating revenues, supported by strategic acquisitions and robust performance in the Institutional segment. However, challenges were noted in the Self-Directed Retail and Payments segments, with declines in key metrics.
Q2-2025 Updates
Positive Updates
Record Net Income and Earnings Growth
Second quarter net income was $71.7 million with diluted EPS of $1.41, representing a 3529% growth over the prior year.
Operating Revenue Increase
Record operating revenues of $956 million, up 17% versus the prior year and up 1% versus the immediately preceding quarter.
Strong Institutional Segment Performance
Institutional segment experienced record net operating revenues and segment income in the second quarter with growth of 28% and 41% respectively.
Strategic Acquisitions and Partnerships
Announced the acquisition of R.J. O'Brien, The Benchmark Company, and a strategic partnership with Bamboo Payment Systems. These transactions aim to enhance StoneX's market position and service offerings.
Metals Market Performance
StoneX Metals delivered a standout performance with net operating revenues up 20% versus the same quarter last year, supported by strategic investments and market volatility.
Negative Updates
Decline in Self-Directed Retail Segment
Net operating revenues were down 14%, and segment income was down 34%, driven by a 34% decline in rate per million in FX CFD contracts.
Challenges in Payments Segment
Payments operating revenues were up 2% year-over-year, but down 13% versus the immediately preceding quarter, with a 15% decline in rate per million.
FX and CFD Revenue Decline
Revenues were down 12% despite a strong increase of 10% in average daily volume, due to a 19% decline in rate per million.
Company Guidance
During the StoneX Group's Second Quarter 2025 earnings call, Chief Financial Officer Bill Dunaway provided an overview of the company's financial performance, highlighting several key metrics. The company reported a net income of $71.7 million and diluted earnings per share of $1.41, reflecting a 35% increase over the prior year. Operating revenues reached a record $956 million, up 17% compared to the previous year. Despite this, net operating revenues decreased by 1% from the record first quarter. The return on equity stood at 15.7%, even as book value increased by 51% over the last two years. Operating revenues from physical contracts surged by 58% year-over-year, and listed derivatives revenues rose 15%. However, FX and CFD revenues declined by 12%, influenced by a 19% drop in rate per million despite a 10% increase in average daily volume. The guidance also highlighted the company's strategic acquisition plans, including R.J. O'Brien and The Benchmark Company, aimed at expanding StoneX's market presence and capabilities.

StoneX Group Financial Statement Overview

Summary
StoneX Group exhibits robust revenue growth and a strong return on equity. However, operational margins are low, and liquidity issues persist with negative cash flows. Despite having no debt in the TTM period, high liabilities relative to assets present potential risks.
Income Statement
76
Positive
StoneX Group shows a strong revenue growth trajectory, with significant increases from $60.86 billion in 2023 to $108.25 billion in the TTM period. The gross profit margin is healthy at 27.15%, and the net profit margin is at a modest 0.26%, indicating room for improvement. However, the EBITDA margin is low at 1.55%, reflecting challenges in operational efficiency.
Balance Sheet
64
Positive
The company's balance sheet reveals a solid equity base with a debt-to-equity ratio of 0, illustrating no reliance on debt in the TTM period. However, the equity ratio is low at 6.01%, indicating high liabilities relative to assets. Return on equity is strong at 15.57%, showcasing effective use of shareholder funds.
Cash Flow
58
Neutral
StoneX Group's cash flow statement highlights negative free cash flow and operating cash flow in the TTM period, suggesting liquidity challenges. The operating cash flow to net income ratio is negative, indicating potential inefficiencies in cash conversion. Despite these challenges, the company has previously shown positive free cash flow growth.
Breakdown
TTMSep 2024Sep 2023Sep 2022Sep 2021Sep 2020
Income StatementTotal Revenue
108.25B99.89B60.86B4.88B4.54B4.03B
Gross Profit
2.13B2.01B1.61B1.12B937.00M793.00M
EBIT
1.61B1.53B1.62B536.00M462.00M368.00M
EBITDA
1.70B1.61B1.22B511.30M291.40M264.60M
Net Income Common Stockholders
276.80M260.80M238.50M355.00M338.00M272.00M
Balance SheetCash, Cash Equivalents and Short-Term Investments
1.40B1.27B1.11B430.00M747.00M358.00M
Total Assets
29.59B27.47B21.94B3.44B3.31B3.04B
Total Debt
12.22B11.32B6.48B5.35B146.60M118.70M
Net Debt
10.82B10.05B5.37B5.00B-465.40M-182.30M
Total Liabilities
27.81B25.76B20.56B2.67B2.43B2.44B
Stockholders Equity
1.78B1.71B1.38B780.00M882.00M603.00M
Cash FlowFree Cash Flow
-153.30M441.70M-70.60M506.00M178.00M510.00M
Operating Cash Flow
-87.20M388.60M-23.70M562.00M218.00M546.00M
Investing Cash Flow
-72.60M-63.70M-53.00M-226.00M-135.00M-151.00M
Financing Cash Flow
299.30M188.00M-169.30M-536.00M12.00M-208.00M

StoneX Group Technical Analysis

Technical Analysis Sentiment
Neutral
Last Price83.80
Price Trends
50DMA
83.33
Positive
100DMA
79.63
Positive
200DMA
70.02
Positive
Market Momentum
MACD
-0.12
Positive
RSI
44.46
Neutral
STOCH
34.95
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SNEX, the sentiment is Neutral. The current price of 83.8 is below the 20-day moving average (MA) of 86.96, above the 50-day MA of 83.33, and above the 200-day MA of 70.02, indicating a neutral trend. The MACD of -0.12 indicates Positive momentum. The RSI at 44.46 is Neutral, neither overbought nor oversold. The STOCH value of 34.95 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for SNEX.

StoneX Group Risk Analysis

StoneX Group disclosed 41 risk factors in its most recent earnings report. StoneX Group reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks

StoneX Group Peers Comparison

Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
BGBGC
76
Outperform
$4.53B35.1614.17%0.86%13.28%117.88%
PJPJT
75
Outperform
$5.25B26.4396.33%0.66%16.04%60.32%
LALAZ
72
Outperform
$4.04B14.9759.68%4.58%9.54%
71
Outperform
$4.14B14.4016.69%67.71%19.42%
71
Outperform
$4.55B22.3817.59%1.01%12.29%99.57%
MCMC
69
Neutral
$4.59B26.0539.98%4.39%45.14%
64
Neutral
$12.79B9.717.54%16971.00%12.07%-7.53%
* Financial Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
SNEX
StoneX Group
83.80
34.79
70.99%
BGC
BGC Group
9.33
0.83
9.76%
LAZ
Lazard
43.22
5.46
14.46%
PIPR
Piper Sandler
254.10
48.85
23.80%
MC
Moelis
57.00
3.90
7.34%
PJT
PJT Partners
149.13
43.21
40.79%

StoneX Group Corporate Events

M&A TransactionsBusiness Operations and Strategy
StoneX Group Announces $900M Merger with R.J. O’Brien
Positive
Apr 14, 2025

On April 13, 2025, StoneX Group Inc. announced a merger agreement to acquire R.J. O’Brien, a leading futures brokerage, for approximately $900 million. The acquisition will significantly enhance StoneX’s position in the global derivatives market, adding over 75,000 clients and expanding its client float by nearly $6 billion. The transaction is expected to close in the second half of 2025, subject to regulatory approvals. This strategic move is anticipated to drive revenue synergies, enhance margins, and improve StoneX’s market positioning, benefiting stakeholders through expanded services and increased market access.

Executive/Board Changes
StoneX Group Grants Shares to Executive Sean O’Connor
Neutral
Apr 3, 2025

On March 31, 2025, StoneX Group Inc. entered into a letter agreement with Executive Sean M. O’Connor, granting him 300,000 restricted shares of Company Stock and performance shares contingent on the company’s return on equity over a four-year period. The performance shares range from zero to a maximum of 337,500, depending on the company’s average ROE, with vesting conditions and determinations made by the company’s board of directors. The grants are part of the StoneX Group Inc. 2022 Omnibus Incentive Compensation Plan and are set to complete vesting by March 31, 2029.

Executive/Board ChangesShareholder Meetings
StoneX Group Elects New Leadership at Annual Meeting
Neutral
Mar 10, 2025

On March 5, 2025, StoneX Group Inc. held its Annual Meeting of Shareholders, where key decisions were made regarding the company’s leadership and governance. Eight directors were elected to serve until the 2026 annual meeting, KPMG LLP was ratified as the independent registered public accounting firm for 2025, and several shareholder proposals were approved, including executive compensation and an amendment to the Omnibus Incentive Compensation Plan. Following the meeting, John Radziwill was elected as Chairman of the Board of Directors, and Sean M. O’Connor was elected as Executive Vice-Chairman.

Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.