Stoneco (STNE) AI Stock Analysis

• Market Cap: $5.10B
• Dividend Yield: N/A
• Average Volume (3M): 4.93M
• Price to Earnings (P/E): 8.7
• Beta (1Y): 1.34
• Revenue Growth: -20.82%
• EPS Growth: -154.29%
• Country: US
• Employees: 7,239
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Infrastructure
• EPS (TTM): 0.44
• Shares Outstanding: 254,617,000
• 10 Day Avg. Volume: 5,634,712
• 30 Day Avg. Volume: 4,931,064
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 1.18
• Enterprise Value/Revenue: 0.45
• Enterprise Value/Gross Profit: 0.60
• Enterprise Value/Ebitda: 3.63
• 1Y Price Target: $20.38
• Price Target Upside: 9.75% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 4

• Rating: 56 Neutral
• Price Target: $15.50 ▼(-16.53% Downside)

Stoneco's overall stock score is primarily impacted by its financial performance challenges, including negative profitability and cash flow issues. However, positive technical momentum and strong earnings call guidance provide some support. The valuation remains a concern due to the negative P/E ratio and lack of dividend yield.

Positive Factors

Strategic Divestitures

The sale of Linx unlocks over BRL 4 billion, allowing Stoneco to focus on core financial services and improve capital allocation, enhancing long-term growth prospects.

Banking Segment Growth

Strong growth in the banking segment indicates successful expansion and increased customer engagement, supporting revenue diversification and long-term sustainability.

Revenue Growth from Continuing Operations

The 20% revenue growth from continuing operations reflects effective repricing and execution strategies, indicating resilience and operational strength in core areas.

Negative Factors

Rising Leverage

Increasing leverage can strain financial flexibility and elevate risk, potentially impacting Stoneco's ability to invest in growth and manage economic downturns.

Negative Profitability Metrics

Negative profitability metrics highlight challenges in cost management, which could hinder Stoneco's ability to sustain growth and improve shareholder value over the long term.

Increased Provisions for Expected Losses

Rising provisions for expected losses indicate potential credit risk and caution in the macroeconomic environment, which could affect Stoneco's financial stability and lending operations.

Stoneco Business Overview & Revenue Model

Company Description

Stoneco (STNE) is a leading financial technology company based in Brazil, specializing in providing payment processing solutions and digital financial services to businesses of all sizes. The company operates primarily within the fintech sector, offering a range of products including payment processing, point-of-sale solutions, and digital banking services. Stoneco's platform enables merchants to accept various payment methods, manage transactions efficiently, and access credit options, thereby streamlining their financial operations.

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's financial performance is challenged by negative profitability metrics and cash flow issues, despite revenue growth. The increasing leverage and negative net income highlight potential risks in financial stability.

Income Statement

Stoneco's income statement shows a mixed performance. The company has experienced revenue growth, with a notable increase in the TTM period. However, profitability metrics such as net profit margin and EBIT margin are concerning, with the company reporting negative net income in recent periods. This indicates challenges in cost management or operational efficiency.

Balance Sheet

The balance sheet reflects a moderate financial position. The debt-to-equity ratio has increased over time, indicating rising leverage, which could pose a risk if not managed carefully. Return on equity is negative, reflecting recent losses, but the equity ratio remains stable, suggesting a reasonable level of equity financing relative to total assets.

Cash Flow

Cash flow analysis reveals significant challenges, with negative free cash flow growth and a low operating cash flow to net income ratio. The company has struggled to convert its earnings into cash, which could impact its ability to invest in growth or service debt.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	13.47B	12.74B	11.36B	9.02B	4.58B	3.18B
Gross Profit	9.95B	9.35B	8.38B	6.35B	2.86B	2.41B
EBITDA	1.65B	988.16M	3.54B	1.35B	-437.71M	1.72B
Net Income	-1.27B	-1.52B	1.59B	-519.42M	-1.36B	854.07M
Balance Sheet
Total Assets	55.16B	54.81B	48.69B	42.25B	42.06B	31.75B
Cash, Cash Equivalents and Short-Term Investments	7.05B	14.55B	5.66B	8.93B	8.84B	10.58B
Total Debt	13.96B	12.90B	5.52B	5.55B	8.36B	6.08B
Total Liabilities	43.54B	42.99B	34.02B	29.30B	28.46B	16.76B
Stockholders Equity	11.57B	11.78B	14.62B	12.89B	13.51B	14.85B
Cash Flow
Free Cash Flow	-647.31M	-4.89B	437.41M	960.44M	2.31B	-398.62M
Operating Cash Flow	579.68M	-3.62B	1.65B	1.68B	3.61B	56.48M
Investing Cash Flow	-1.37B	1.59B	-845.44M	-1.87B	-2.98B	-5.81B
Financing Cash Flow	1.63B	5.04B	-148.80M	-2.81B	1.42B	7.22B

Stoneco Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 18.57
• 50DMA: Positive
• 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 Positive. The current price of 18.57 is above the 20-day moving average (MA) of 17.97, above the 50-day MA of 15.73, and above the 200-day MA of 12.49, indicating a bullish trend. The MACD of 0.95 indicates Positive momentum. The RSI at 64.94 is Neutral, neither overbought nor oversold. The STOCH value of 46.25 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for STNE.

Stoneco Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
PAYO	75 Outperform	2.33B	24.27	12.95%	―	13.02%	-2.57%
FOUR	73 Outperform	7.16B	29.56	13.85%	―	23.86%	79.35%
PATH	73 Outperform	6.54B	340.06	1.21%	―	8.25%	―
DLO	73 Outperform	4.36B	28.58	32.57%	―	22.02%	12.42%
PAGS	73 Outperform	3.41B	8.32	15.03%	1.37%	0.09%	5.38%
STNE	56 Neutral	$5.10B	8.73	-8.77%	―	-20.82%	-154.29%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%

Stoneco Corporate Events

StoneCo Ltd. Releases Interim Financial Statements with Strategic Adjustments

StoneCo Ltd. has released its unaudited interim condensed consolidated financial statements for the period ending June 30, 2025. The report highlights a classification change in accounting policy, resulting in certain subsidiaries being marked as non-current assets held for sale and discontinued operations. This adjustment reflects strategic shifts in StoneCo’s operations and may impact its financial positioning and stakeholder interests. The financial statements show a decrease in cash and cash equivalents and short-term investments compared to December 2024, while accounts receivable from card issuers increased significantly.

StoneCo Reports Strong Q2 2025 Financial Results Amid Strategic Shift

On August 7, 2025, StoneCo Ltd. reported its financial results for the second quarter of 2025, highlighting a 20.2% year-over-year increase in total revenue and income from continuing operations, reaching R$3,500.9 million. The company noted a strategic shift in its financial reporting to focus on continuing operations following the divestment of certain software assets. Adjusted Gross Profit rose by 13.9% year-over-year to R$1,561.5 million, and Adjusted Net Income from both continuing and discontinued operations increased by 26.9% year-over-year to R$630.9 million. This growth was attributed to stronger client monetization and an expanding client base, despite challenges such as increased CDI rates impacting margins. The company also reported a significant share buyback program, reducing outstanding shares by 41.7 million, which contributed to a 44.7% rise in Adjusted Basic EPS.

StoneCo Announces Major Divestment of Software Assets

On July 22, 2025, StoneCo Ltd. announced significant divestments in its software segment, including the sale of Linx and related assets to TOTVS for R$3.41 billion and SimplesVet to PetLove for R$140 million. These transactions aim to streamline operations and focus on core growth strategies, potentially impacting shareholder value and the company’s market positioning. The divestments represent a substantial portion of StoneCo’s software revenue and profitability, with the proceeds expected to be used in line with the company’s capital allocation framework.