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Stoneco (STNE)
NASDAQ:STNE
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Stoneco
(NASDAQ:STNE)
Rating:60Neutral
Price Target:
$15.00
▼(-2.09% Downside)
Positive Factors
Earnings Potential
The cash sweep strategy could significantly benefit the company's earnings before taxes, potentially lifting adjusted EBT by R$13 million for every R$1 billion net movement from demand deposits to time deposits.
Financial Strategy
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.
Price Target
Analyst raises the price objective to US$15, reflecting new EPS estimates and seeing significant upside potential.
Negative Factors
Macroeconomic Risks
There is a downside risk of the stock price reaching $10 in the event of a prolonged macroeconomic downturn.
Market Share
STNE lost 6 basis points of market share on credit and debit q/q (and lost 26 bp y/y).
Net Income Projections
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
$4.12B
Dividend YieldN/A
Average Volume (3M)4.83M
Price to Earnings (P/E)8.7
Beta (1Y)1.38
Revenue Growth-20.82%
EPS Growth-154.29%
CountryUS
Employees7,239
SectorTechnology
Sector Strength94
IndustrySoftware - Infrastructure
Share Statistics
EPS (TTM)0.43
Shares Outstanding254,617,000
10 Day Avg. Volume5,474,008
30 Day Avg. Volume4,827,463
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)0.00
Price to Sales (P/S)0.00
P/FCF Ratio0.00
Enterprise Value/Market Cap1.45
Enterprise Value/Revenue0.45
Enterprise Value/Gross Profit0.61
Enterprise Value/Ebitda4.38
Forecast
1Y Price Target
$16.88Price Target Upside10.18% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering5
Stoneco Business Overview & Revenue Model
Company DescriptionStoneco (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 MoneyStoneco 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 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:Aug 07, 2025
(Q2-2025)
| % Change Since: 13.48%|
Next Earnings Date:Nov 18, 2025
Earnings Call Sentiment Neutral
The call highlighted strong financial performance and successful strategic divestitures, along with significant share buybacks, indicating a positive outlook. However, challenges such as slowing TPV growth, increased provisions, and a high cost of risk were noted, reflecting some caution due to macroeconomic conditions.Q2-2025 Updates
Positive Updates
Strong Financial Performance
Adjusted net income increased by 27% year-over-year to BRL 631 million, driven by a 21% growth in financial services. Adjusted basic EPS grew by 45% year-over-year to BRL 2.33 per share.
Successful Software Divestitures
Sale of Linx to TOTVS for an enterprise value of BRL 3.05 billion and SimplesVet for BRL 140 million. Total value unlocked from sales, including goodwill retention, is over BRL 4 billion.
Record Share Buybacks
Returned 41% of the BRL 3 billion excess capital to shareholders through share buybacks, totaling BRL 2.6 billion over the last 12 months.
Growth in Banking and Credit
Active banking client base grew 23% year-over-year, with client deposits up 36% year-over-year. Credit portfolio grew 25% sequentially to BRL 1.8 billion.
Negative Updates
Slowing TPV Growth
MSMB TPV grew by only 12% year-over-year, with card TPV growth at 6.4%, indicating deceleration due to the macroeconomic environment and repricing initiatives.
Increased Provisions for Expected Losses
Provisions for expected losses increased significantly from BRL 34 million in Q1 to BRL 82 million in Q2, driven by portfolio expansion and a cautious macroeconomic outlook.
High Cost of Risk
Cost of risk increased to 20% from 10% in the first quarter, though it would have been 13.5% without the increased provisions.
Company Guidance
During StoneCo's second quarter 2025 earnings call, the company provided updated guidance reflecting its strategic shift following recent software divestitures. The company is now reporting discontinued operations separately and focusing on continuing operations, with emphasis on financial services. The updated gross profit guidance indicates over 14.5% year-over-year growth, surpassing BRL 6.3 billion. Additionally, StoneCo increased its expected EPS growth from 18% to 32% year-over-year, reflecting stronger-than-anticipated net income performance. The adjusted net income guidance was revised upward from BRL 2.4 billion to BRL 2.6 billion. StoneCo remains committed to returning BRL 3 billion in excess capital to shareholders, with 41% of this amount already returned through share buybacks by mid-2025. Overall, despite a challenging macroeconomic environment, StoneCo reported solid financial performance, with a 27% year-over-year increase in adjusted net income to BRL 631 million and a 45% year-over-year increase in adjusted basic EPS to BRL 2.33 per share.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
Positive
15.32
Price Trends
14.50
Positive
13.57
Positive
11.52
Positive
Market Momentum
0.13
Negative
61.59
Neutral
92.20
Negative
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 15.32 is above the 20-day moving average (MA) of 13.70, above the 50-day MA of 14.50, and above the 200-day MA of 11.52, indicating a bullish trend. The MACD of 0.13 indicates Negative momentum. The RSI at 61.59 is Neutral, neither overbought nor oversold. The STOCH value of 92.20 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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 (56)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
79 Outperform | $2.33B | 17.13 | 25.17% | 0.53% | 12.92% | 101.57% | |
74 Outperform | $2.44B | 25.86 | 13.86% | ― | 13.02% | -2.57% | |
73 Outperform | $2.74B | 24.94 | -41.63% | ― | 13.29% | 79.98% | |
73 Outperform | $3.13B | 25.89 | 26.10% | ― | ― | ― | |
63 Neutral | $2.95B | 7.27 | 14.36% | 1.58% | 2.38% | 9.88% | |
60 Neutral | $4.12B | 8.73 | -8.77% | ― | -20.82% | -154.29% | |
56 Neutral | $295.30M | 5.57 | -5.25% | 2.62% | 11.03% | -74.02% |
* Technology Sector Average
Performance Comparison
STNE
Stoneco
15.32
1.26
8.96%
EVTC
Evertec
37.00
3.96
11.99%
PAGS
Pagseguro Digital
8.75
-4.73
-35.09%
PAYO
Payoneer
6.69
-0.31
-4.43%
DOCN
DigitalOcean Holdings
30.54
-6.08
-16.60%
DLO
DLocal
15.35
7.69
100.39%
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.