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Stoneco (STNE)
:STNE
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Stoneco
(NASDAQ:STNE)
63Neutral
Positive Factors
Customer Growth
Stone added 108k clients, reaching a total client base of 4.0 million, showing increased customer engagement.
Financial Performance
Net income increased by 32% year-over-year, reflecting robust margin expansion and effective cost control.
Product Bundling
The bundling of banking products with payments is gaining strength, with a significant rise in the loan book and deposits.
Negative Factors
Impairment Loss
Stone reported a net loss of R$2,922 million, due to the recognition of a R$3,558 million impairment loss for the software business unit.
Market Share
STNE lost 6 basis points of market share on credit and debit q/q (and lost 26 bp y/y).
Risk Management
The company again significantly under-provisioned for risk in order to make the numbers work.
Stoneco (STNE) vs. S&P 500 (SPY)
Market Cap
$2.90B
Dividend YieldN/A
Average Volume (3M)7.69M
Price to Earnings (P/E)8.7
Beta (1Y)1.47
Revenue Growth-8.52%
EPS Growth-180.71%
CountryUS
Employees7,239
SectorTechnology
Sector Strength40
IndustrySoftware - Infrastructure
Share Statistics
EPS (TTM)-0.83
Shares Outstanding257,372,830
10 Day Avg. Volume6,421,672
30 Day Avg. Volume7,685,300
Financial Highlights & Ratios
PEG Ratio0.09
Price to Book (P/B)N/A
Price to Sales (P/S)6.43
Price to Cash Flow (P/CF)N/A
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$12.07Price Target Upside14.08% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering8
Stoneco Business Overview & Revenue Model
Company DescriptionStoneCo Ltd. (STNE) is a financial technology company based in Brazil, specializing in providing innovative payment solutions and financial services to merchants and businesses of all sizes. The company operates primarily in the payments industry, offering a comprehensive suite of products and services that include point-of-sale (POS) systems, digital payment processing, and business management software. StoneCo's mission is to empower merchants by providing them with the tools and services needed to manage their operations efficiently and drive growth.
How the Company Makes MoneyStoneCo makes money primarily through the fees it charges for its payment processing services. This includes transaction fees from merchants who use its POS systems and digital payment solutions. The company also generates revenue through the sale and rental of its POS devices, as well as through subscription fees for its business management software. Additionally, StoneCo offers credit and other financial services to merchants, earning interest income and service fees. Strategic partnerships with financial institutions and technology providers also contribute to StoneCo's revenue by expanding its service offerings and customer base.
Stoneco Financial Statement Overview
Summary
Stoneco shows strong revenue growth but struggles with profitability and cash flow stability. The balance sheet reveals moderate leverage but a concerning decrease in equity.Income Statement
Stoneco shows a strong revenue growth trajectory, with a significant increase in total revenue over the years. However, the company has struggled with profitability, as evidenced by negative net income in recent years, impacting net profit margins adversely.65
Positive
Balance Sheet
The company's balance sheet reveals a moderate debt-to-equity ratio, indicating a manageable level of leverage. However, the decrease in stockholders' equity over time presents a concern. The equity ratio remains moderate, reflecting a balanced asset structure.58
Neutral
Cash Flow
Stoneco's cash flow statement indicates volatility, with fluctuating free cash flow figures and periods of negative cash flow. The absence of operating cash flow in the latest period raises concerns about cash generation stability.45
Neutral
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 12.74B | 11.36B | 9.02B | 4.58B | 3.18B | Gross Profit |
| 9.35B | 8.38B | 6.35B | 2.86B | 2.41B | EBIT |
| 6.11B | 5.25B | 3.98B | 1.09B | 1.47B | EBITDA |
| 6.40B | 3.54B | 1.35B | 739.60K | 1.72B | Net Income Common Stockholders |
| -1.51B | 1.59B | -526.40M | -1.38B | 854.07M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 14.55B | 5.66B | 8.93B | 8.84B | 10.58B | Total Assets |
| 54.81B | 48.69B | 42.25B | 42.06B | 31.75B | Total Debt |
| 12.90B | 5.52B | 5.55B | 8.36B | 6.08B | Net Debt |
| 7.67B | 3.34B | 4.04B | 3.87B | 3.64B | Total Liabilities |
| 42.99B | 34.02B | 29.30B | 28.46B | 16.76B | Stockholders Equity |
| 11.78B | 14.62B | 12.89B | 13.51B | 14.85B |
| Cash Flow | Free Cash Flow | |||
| 0.00 | 437.41M | 960.44M | 2.31B | -398.62M | Operating Cash Flow |
| 0.00 | 1.65B | 1.68B | 3.61B | 56.48M | Investing Cash Flow |
| 0.00 | -845.44M | -1.87B | -2.98B | -5.81B | Financing Cash Flow |
| 0.00 | -148.80M | -2.81B | 1.42B | 7.22B |
Stoneco Technical Analysis
Neutral
10.58
Price Trends
9.85
Positive
9.45
Positive
10.84
Negative
Market Momentum
0.42
Positive
53.92
Neutral
26.23
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For STNE, the sentiment is Neutral. The current price of 10.58 is above the 20-day moving average (MA) of 10.53, above the 50-day MA of 9.85, and below the 200-day MA of 10.84, indicating a neutral trend. The MACD of 0.42 indicates Positive momentum. The RSI at 53.92 is Neutral, neither overbought nor oversold. The STOCH value of 26.23 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for STNE.
Stoneco Risk Analysis
Stoneco disclosed 91 risk factors in its most recent earnings report. Stoneco 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
Stoneco Peers Comparison
Overall Rating
UnderperformOutperform
Sector (57)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
74 Outperform | $57.74B | 14.60 | 20.00% | ― | 7.10% | 4.45% | |
73 Outperform | $31.14B | 11.04 | 14.50% | ― | 10.06% | 38060.98% | |
73 Outperform | $22.86B | 15.09 | 6.94% | 1.18% | 4.68% | 63.39% | |
69 Neutral | $45.08B | 43.02 | 25.46% | ― | -63.44% | 50.94% | |
63 Neutral | $2.90B | 8.73 | -9.48% | ― | -8.52% | -180.71% | |
57 Neutral | $18.57B | 9.42 | -13.42% | 2.72% | 5.01% | -23.43% | |
51 Neutral | $39.47B | 52.55 | 4.65% | 2.12% | -17.38% | ― |
* Technology Sector Average
Performance Comparison
STNE
Stoneco
10.58
-7.10
-40.16%
FIS
Fidelity National Info
69.90
-1.81
-2.52%
GPN
Global Payments
84.88
-41.93
-33.07%
PYPL
PayPal Holdings
58.37
-7.97
-12.01%
XYZ
Block
50.26
-28.09
-35.85%
ADYEY
Adyen
13.84
-2.45
-15.04%
Stoneco Earnings Call Summary
Earnings Call Date: Mar 18, 2025 | % Change Since: 7.41% | Next Earnings Date: Jun 3, 2025
Earnings Call Sentiment Positive
The earnings call reflected a strong performance in most financial metrics, with significant growth in MSMB TPV, retail deposits, and the credit portfolio. Despite some challenges, including a slight shortfall in MSMB card TPV and increased financial expenses, the company demonstrated effective strategy execution and resilience. The goodwill impairment in the software division was a notable negative, but overall, the highlights, particularly in financial growth and client engagement, outweighed the lowlights.Highlights
MSMB TPV Growth
MSMB card TPV reached BRL403 billion, representing a 15% year-over-year growth. Though it slightly missed the BRL412 billion guidance, total MSMB TPV exceeded expectations, reaching BRL454 billion, a 22% year-over-year increase.
Retail Deposits Surpass Guidance
Retail deposits closed 2024 at BRL8.7 billion, exceeding the BRL7 billion guidance. This reflects strong performance in payments and banking offerings.
Credit Portfolio Expansion
The credit portfolio reached BRL1.2 billion, significantly exceeding the BRL800 million target. Non-performing loans over 90 days were controlled at 3.61%.
Net Income and Cost Efficiency
Net income was BRL2.2 billion, surpassing the BRL1.9 billion guidance. Adjusted administrative expenses were BRL994 million, below the BRL1.125 billion guidance.
Strong Fourth Quarter Results
Adjusted EBT grew 22% and adjusted net income increased by 18% year-over-year in the fourth quarter. Adjusted basic EPS grew 26% compared to the fourth quarter of '23.
Banking Client Base Growth
Banking active client base increased 46% year-over-year to 3.1 million, with retail deposits growing 42% year-over-year to BRL8.7 billion.
Software Segment Performance
Software revenue grew 15% year-over-year, with adjusted EBITDA showing a strong 54% growth, reaching a margin of 21.6%.
Lowlights
MSMB Card TPV Shortfall
MSMB card TPV fell slightly short of the BRL412 billion guidance, reaching BRL403 billion due to faster-than-expected adoption of PIX.
Higher Financial Expenses
Financial expenses increased due to the higher yield curve, impacting the cost of operations, though the company deferred price increases to maintain client relationships.
Goodwill Impairment in Software Division
Recognized a goodwill impairment charge of BRL3.6 billion for the software cash generating units due to standalone organic growth trends and challenging macroeconomic environment.
Company Guidance
During StoneCo's Fourth Quarter 2024 Earnings Conference Call, the company reported exceeding its targets for several key performance indicators, except for MSMB card TPV. The MSMB card TPV reached BRL403 billion, slightly below the target of BRL412 billion, but total MSMB TPV exceeded expectations at BRL454 billion, marking a 22% year-over-year increase. Retail deposits closed the year at BRL8.7 billion, surpassing the guidance of BRL7 billion. The MSMB take rate was 2.55%, above the expected 2.49%, and the credit portfolio reached BRL1.2 billion, exceeding the BRL800 million target with non-performing loans over 90 days at 3.61%. Adjusted administrative expenses were reported at BRL994 million, better than the guided BRL1.125 billion, contributing to a net income of BRL2.2 billion, which surpassed the BRL1.9 billion target. Looking ahead, StoneCo expects continued growth in 2025, focusing on initiatives like investment products and workflow tools to accelerate deposit and overall growth.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.