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Stoneco (STNE)
NASDAQ:STNE
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Stoneco
(NASDAQ:STNE)
Rating:56Neutral
Price Target:
$14.00
▲(4.95%Upside)
Positive Factors
Financial Performance
The company's recent increased utilization of its SCFI license allows it to offer 'time deposits' to customers, which is seen as a long-term positive change.
Strategic Initiatives
A successful divestment could be supportive of Stone’s stock and lead to further capital distribution.
Negative Factors
Macroeconomic Risks
There is a downside risk of the stock price reaching $10 in the event of a prolonged macroeconomic downturn.
Net Income Expectations
Net income for Stone is expected to decline over the next five years, in stark contrast to the current sell-side consensus which anticipates double-digit growth.
Stoneco (STNE) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$3.82B
Dividend YieldN/A
Average Volume (3M)5.44M
Price to Earnings (P/E)8.7
Beta (1Y)1.32
Revenue Growth-14.03%
EPS Growth-167.03%
CountryUS
Employees7,239
SectorTechnology
Sector Strength86
IndustrySoftware - Infrastructure
Share Statistics
EPS (TTM)0.33
Shares Outstanding254,617,000
10 Day Avg. Volume5,329,986
30 Day Avg. Volume5,444,428
Financial Highlights & Ratios
PEG Ratio-1.46
Price to Book (P/B)2.08
Price to Sales (P/S)0.00
P/FCF Ratio-12.14
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$16.50Price Target Upside23.69% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering5
Stoneco Business Overview & Revenue Model
Company DescriptionStoneCo Ltd. (STNE) is a financial technology company based in Brazil, primarily operating in the digital payments sector. The company provides technology solutions to merchants and integrates payment platforms to facilitate online and in-store transactions. StoneCo's core services include payment processing, point-of-sale systems, and financial technology solutions that cater to small and medium-sized businesses across various industries.
How the Company Makes MoneyStoneCo generates revenue primarily through transaction fees charged to merchants for payment processing services. The company offers a suite of financial solutions, including point-of-sale hardware, software, and value-added services like receivables financing and working capital loans. StoneCo's revenue streams are diversified through partnerships with other financial institutions and integration with various e-commerce platforms, allowing it to expand its reach and service offerings. Additionally, StoneCo earns income from subscription fees for its software services and interest on financing solutions provided to its merchant clients.
Stoneco Key Performance Indicators (KPIs)
Any
Payments: Total TPV
Measures the total transaction volume processed, indicating the scale of Stoneco's payment operations and its market penetration.
Measures the total transaction volume processed, indicating the scale of Stoneco's payment operations and its market penetration.
Data provided by:
Main Street Data
Main Street DataStoneco Earnings Call Summary
Earnings Call Date:May 08, 2025
(Q1-2025)
| % Change Since: -3.40%|
Next Earnings Date:Aug 07, 2025
Earnings Call Sentiment Positive
The earnings call presented a generally positive outlook with strong year-over-year growth in key financial metrics, effective capital returns, and growing client engagement. However, some sequential declines in financial performance and anticipated TPV growth deceleration were noted, along with increased financial expenses. Despite these challenges, the company's strategic initiatives and continued focus on profitability suggest a stable future outlook.Q1-2025 Updates
Positive Updates
Strong Year-Over-Year Growth in Key Financial Metrics
Gross profits grew by 19% year-over-year, with EPS growing by 36% year-over-year, surpassing the 18% growth implied in the full-year outlook. Adjusted net income also grew 23% year-over-year.
Share Repurchase and Capital Returns
StoneCo repurchased R$843 million or 15.1 million shares during the quarter. Over the past 12 months, the company has returned R$2.4 billion in share buybacks, highlighting a strong capital return policy.
MSMB Active Client Base and Engagement Growth
The MSMB payments active client base increased by 17% year-over-year, with the heavy user metric reaching 38%, up from 37% in the previous quarter.
Software Segment Achievements
Software segment revenues grew 11% year-over-year, with adjusted EBITDA growing 12% and a reduction in Software CapEx from 71% of EBITDA to 51% this quarter.
Negative Updates
Sequential Decline in Certain Financial Metrics
Adjusted gross profit decreased by 3% quarter-over-quarter, and adjusted net income decreased by 17% quarter-over-quarter due to lower TPV and higher cost of services.
Anticipated TPV Growth Deceleration
The company expects some deceleration in TPV growth as a result of repricing policies and challenging macroeconomic conditions.
Increased Financial Expenses
Financial expenses increased by 23% year-over-year, driven by higher average CDI during the periods, partially offset by the cash sweep strategy.
Company Guidance
During the first quarter of 2025, StoneCo demonstrated strong financial performance, exceeding its annual guidance targets across several key metrics. Gross profits increased by 19% year-over-year, surpassing the 14% annual growth outlined in their guidance, while adjusted basic EPS grew by 36%, significantly above the expected 18% growth for the year. The company also repurchased R$843 million worth of shares, boosting its distribution yield to 12% over the past 12 months. StoneCo's adjusted net income rose by 23% year-over-year, though it experienced a 17% decrease quarter-over-quarter due to higher investments and tax rates. The company's strategic repricing efforts, which were implemented in response to an increase in the yield curve, resulted in a notable improvement in profitability. StoneCo's client base and transaction volumes, particularly in MSMB payments, also showed robust growth, with MSMB active clients growing by 17% year-over-year. Additionally, the company's credit portfolio reached R$1.4 billion, supported by a stable non-performing loan ratio and a coverage ratio of 256%. StoneCo announced a new R$2 billion share repurchase program, underscoring its commitment to shareholder returns while maintaining a disciplined capital allocation strategy.Stoneco Financial Statement Overview
Summary
Stoneco exhibits strong revenue growth with a 16% increase in TTM. However, challenges remain due to negative net income and cash flow performance, indicating issues in converting profits into cash. The balance sheet is stable, but declining equity and increasing liabilities need careful monitoring.Income Statement
Stoneco's revenue has shown a positive growth trend over the years, with a notable 16% increase in the TTM. However, the company remains unprofitable with a negative net income, impacting its net profit margin negatively. Gross profit margins are strong, indicating robust core profitability, but the net losses signal challenges in managing expenses or other factors impacting the bottom line.60
Neutral
Balance Sheet
The balance sheet reflects a relatively stable financial structure with a manageable debt-to-equity ratio. The equity ratio suggests that a significant portion of assets is financed by equity, which is generally positive. However, the declining stockholders' equity and increasing liabilities could pose a risk if not managed properly.65
Positive
Cash Flow
Stoneco's cash flow performance is concerning, with negative free cash flow and operating cash flow in the TTM, indicating cash management challenges. The free cash flow to net income ratio is unfavorable, highlighting the company's struggle to convert profits into cash.50
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 |
| EBITDA | 988.16M | 3.54B | 1.35B | -437.71M | 1.72B |
| Net Income | -1.52B | 1.59B | -519.42M | -1.36B | 854.07M |
Balance Sheet | |||||
| Total Assets | 54.81B | 48.69B | 42.25B | 42.06B | 31.75B |
| Cash, Cash Equivalents and Short-Term Investments | 14.55B | 5.66B | 8.93B | 8.84B | 10.58B |
| Total Debt | 12.90B | 5.52B | 5.55B | 8.36B | 6.08B |
| 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 | -4.89B | 437.41M | 960.44M | 2.31B | -398.62M |
| Operating Cash Flow | -3.62B | 1.65B | 1.68B | 3.61B | 56.48M |
| Investing Cash Flow | 1.59B | -845.44M | -1.87B | -2.98B | -5.81B |
| Financing Cash Flow | 5.04B | -148.80M | -2.81B | 1.42B | 7.22B |
Stoneco Technical Analysis
Negative
13.34
Price Trends
14.45
Negative
12.99
Positive
11.33
Positive
Market Momentum
-0.25
Positive
36.68
Neutral
15.95
Positive
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 13.34 is below the 20-day moving average (MA) of 15.18, below the 50-day MA of 14.45, and above the 200-day MA of 11.33, indicating a neutral trend. The MACD of -0.25 indicates Positive momentum. The RSI at 36.68 is Neutral, neither overbought nor oversold. The STOCH value of 15.95 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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 3 New Risks
1.
One of our founder shareholders holds a large amount of voting power over our common shares, and as a result has influence over certain of our activities and corporate decisions. Q4, 2022
2.
Any significant disruption to Linx's cloud hosting network infrastructure could damage its reputation, forcing it to provide credits or refunds, resulting in early termination of customer contracts or loss of customers, and adversely affect its business. Q4, 2022
3.
Links depends on telecommunications, internet and data center providers for its Software as a Service (SaaS), Cloud and on-premise infrastructure and any fluctuation or interruption in the provision of these services may impair the provision of services by Linx and affect its profitability. Q4, 2022
Stoneco Peers Comparison
Overall Rating
UnderperformOutperform
Sector (63)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
81 Outperform | $3.19B | 24.76 | 26.10% | ― | ― | ― | |
76 Outperform | $2.15B | 16.82 | 24.65% | 0.60% | 17.39% | 100.46% | |
71 Outperform | $2.46B | 22.78 | 15.97% | ― | 14.86% | -0.94% | |
70 Outperform | $2.62B | 26.39 | -41.63% | ― | 13.21% | 109.61% | |
64 Neutral | $2.70B | 6.67 | 14.36% | 0.20% | 2.38% | 9.88% | |
63 Neutral | $34.55B | 5.25 | -11.40% | 1.91% | 5.47% | -20.39% | |
56 Neutral | $3.82B | 8.73 | -8.85% | ― | -14.03% | -167.03% |
* Technology Sector Average
Performance Comparison
STNE
Stoneco
13.34
0.00
0.00%
EVTC
Evertec
33.11
-0.79
-2.33%
PAGS
Pagseguro Digital
8.02
-4.79
-37.39%
PAYO
Payoneer
6.72
1.31
24.21%
DOCN
DigitalOcean Holdings
28.74
-3.54
-10.97%
DLO
DLocal
10.83
3.55
48.76%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.