Stoneco (STNE) AI Stock Analysis

• Market Cap: $4.57B
• Dividend Yield: N/A
• Average Volume (3M): 4.72M
• Price to Earnings (P/E): ―
• Beta (1Y): 1.35
• Revenue Growth: -25.51%
• EPS Growth: -139.28%
• Country: US
• Employees: 7,239
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Infrastructure
• EPS (TTM): 0.48
• Shares Outstanding: 254,617,000
• 10 Day Avg. Volume: 5,675,976
• 30 Day Avg. Volume: 4,723,593
• PEG Ratio: 0.05
• Price to Book (P/B): 1.27
• Price to Sales (P/S): 1.17
• P/FCF Ratio: -3.05
• Enterprise Value/Market Cap: 0.00
• Enterprise Value/Revenue: 0.00
• Enterprise Value/Gross Profit: 0.00
• Enterprise Value/Ebitda: 0.00
• 1Y Price Target: $20.50
• Price Target Upside: 21.81% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 3
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 51 Neutral
• Price Target: $17.00 ▲(1.01% Upside)

Stoneco's overall stock score is primarily influenced by its financial performance, which highlights significant profitability and cash flow challenges despite revenue growth. The technical analysis suggests short-term bearish momentum, while the valuation is hampered by negative earnings. The earnings call provides a more positive outlook with strong EPS growth and capital returns, but macroeconomic challenges remain a concern.

Positive Factors

Revenue and Income Growth

The 16% year-over-year growth in revenue and income indicates strong market demand and effective client monetization, supporting long-term business expansion.

Banking Operation Expansion

The expansion of the client base by 22% reflects Stoneco's successful penetration in the digital banking sector, enhancing its competitive position.

Consistent Capital Returns

Returning BRL 2.8 billion to shareholders demonstrates strong capital management and commitment to shareholder value, indicating financial stability.

Negative Factors

Rising Financial Expenses

The 28% increase in financial expenses can erode profitability and strain cash flow, posing a risk to long-term financial health.

Negative Profitability Metrics

Negative profitability metrics indicate challenges in cost management, which could hinder sustainable growth and operational efficiency.

Rising Debt Levels

Increasing debt levels may limit financial flexibility and elevate risk, impacting Stoneco's ability to invest in growth opportunities.

Stoneco Business Overview & Revenue Model

Company Description

StoneCo Ltd. provides financial technology solutions to merchants and integrated partners to conduct electronic commerce across in-store, online, and mobile channels in Brazil. It distributes its solutions, principally through proprietary Stone Hubs, which offer hyper-local sales and services; and technology and solutions to digital merchants through sales and technical personnel and software vendors, as well as sells solutions to brick-and-mortar and digital merchants through sales team. As of December 31, 2021, the company served approximately 1,766,100 clients primarily small-and-medium-sized businesses; and marketplaces, e-commerce platforms, and integrated software vendors. StoneCo Ltd. was founded in 2000 and is headquartered in George Town, the Cayman Islands. StoneCo Ltd. operates as a subsidiary of HR Holdings, LLC.

How the Company Makes Money

Stoneco generates revenue primarily through transaction fees charged to merchants for processing payments. The company earns a percentage of each transaction processed through its platform, which constitutes a significant portion of its revenue stream. Additionally, Stoneco offers value-added services such as data analytics, financial management tools, and working capital loans, which also contribute to its earnings. The company has established partnerships with various financial institutions and payment networks, enhancing its service offerings and expanding its customer base. Furthermore, Stoneco's growth is supported by the increasing adoption of digital payments in Brazil and the broader Latin American market, positioning it favorably in a rapidly evolving fintech landscape.

Stoneco Financial Statement Overview

Summary

Stoneco demonstrates revenue growth and strong gross profit margins, but faces significant profitability and cash flow challenges. The increasing leverage and negative return on equity pose risks to financial stability. Overall, while there are strengths in revenue generation, the company needs to address its profitability and cash flow issues to improve its financial health.

Income Statement

Stoneco's revenue has shown consistent growth, with a TTM increase of 2.62%. However, the company struggles with profitability, as evidenced by a negative net profit margin of -8.29% in the TTM. The gross profit margin remains strong at 74.82%, indicating efficient cost management. Despite this, the negative EBIT and EBITDA margins in previous years highlight ongoing operational challenges.

Balance Sheet

The company's debt-to-equity ratio has increased to 1.38 in the TTM, indicating higher leverage and potential risk. The return on equity is negative at -9.86%, reflecting the company's inability to generate profit from shareholders' equity. However, the equity ratio remains stable, suggesting a balanced asset structure.

Cash Flow

Stoneco's cash flow situation is concerning, with negative operating cash flow and free cash flow in the TTM. The free cash flow growth rate is positive at 119.05%, but this is due to a low base effect. The operating cash flow to net income ratio is negative, indicating cash flow issues relative to earnings.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	13.82B	12.74B	11.36B	9.02B	4.58B	3.18B
Gross Profit	10.34B	9.35B	8.38B	6.35B	2.86B	2.41B
EBITDA	2.77B	988.16M	3.54B	1.35B	-437.71M	1.72B
Net Income	-1.15B	-1.52B	1.59B	-519.42M	-1.36B	854.07M
Balance Sheet
Total Assets	58.60B	54.81B	48.69B	42.25B	42.10B	31.75B
Cash, Cash Equivalents and Short-Term Investments	5.90B	14.55B	12.06B	8.93B	8.84B	11.29B
Total Debt	16.16B	12.90B	5.52B	5.55B	8.36B	6.08B
Total Liabilities	46.81B	42.99B	34.02B	29.30B	28.47B	16.76B
Stockholders Equity	11.75B	11.78B	14.62B	12.89B	13.54B	14.85B
Cash Flow
Free Cash Flow	-1.42B	-4.89B	437.41M	960.44M	2.31B	-398.62M
Operating Cash Flow	-334.38M	-3.62B	1.65B	1.68B	3.61B	56.48M
Investing Cash Flow	-1.18B	1.59B	-845.44M	-1.87B	-2.98B	-5.81B
Financing Cash Flow	3.33B	5.04B	-148.80M	-2.81B	1.42B	7.22B

Stoneco Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 16.83
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For STNE, the sentiment is Negative. The current price of 16.83 is below the 20-day moving average (MA) of 18.42, below the 50-day MA of 18.23, and above the 200-day MA of 14.03, indicating a neutral trend. The MACD of 0.12 indicates Positive momentum. The RSI at 35.54 is Neutral, neither overbought nor oversold. The STOCH value of 35.46 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for STNE.

Stoneco Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
DLO	77 Outperform	$4.06B	26.77	32.78%	―	22.02%	12.42%
PAYO	73 Outperform	$1.88B	28.31	9.79%	―	10.58%	-45.52%
PATH	71 Outperform	$7.73B	396.08	1.15%	―	8.25%	―
FOUR	69 Neutral	$5.84B	31.11	15.52%	―	23.16%	27.38%
PAGS	68 Neutral	$3.12B	7.61	14.59%	1.47%	0.09%	5.38%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
STNE	51 Neutral	$4.57B	―	-8.77%	―	-25.51%	-139.28%

Stoneco Corporate Events

StoneCo Releases Q3 2025 Financial Statements Highlighting Discontinued Operations

StoneCo Ltd. released its unaudited interim condensed consolidated financial statements for the period ending September 30, 2025. The report highlights the company’s financial position, including assets classified as held for sale due to discontinued operations in the second quarter of 2025. The financial statements, reviewed by Ernst & Young, indicate no significant issues, affirming a fair view of the company’s financial status. This development may impact StoneCo’s strategic positioning as it adjusts its asset portfolio, potentially affecting stakeholders’ interests.

StoneCo Reports Strong Third Quarter 2025 Financial Results

StoneCo Ltd. reported its financial results for the third quarter of 2025, showing a significant increase in revenue and profitability. The company’s total revenue and income from continuing operations reached R$3,566.8 million, marking a 16.5% year-over-year increase, driven by stronger client monetization and an expanding client base. Adjusted gross profit grew by 11.7% year-over-year to R$1,604.9 million, despite higher financial expenses due to increased CDI rates. The company’s strategic repricing initiatives and growth in its loan portfolio contributed to these positive results, although they faced challenges from increased financial expenses and provisions for credit.