NasdaqGS:STNE

Stock Analysis Report

Executive Summary

StoneCo Ltd. provides financial technology solutions that empower merchants and integrated partners to conduct electronic commerce across in-store, online, and mobile channels in Brazil.


Snowflake Analysis

Exceptional growth potential with questionable track record.


Similar Companies

Share Price & News

How has StoneCo's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: STNE has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

4.1%

STNE

2.1%

US IT

0.9%

US Market


1 Year Return

78.3%

STNE

37.2%

US IT

20.0%

US Market

Return vs Industry: STNE exceeded the US IT industry which returned 37.2% over the past year.

Return vs Market: STNE exceeded the US Market which returned 20.1% over the past year.


Shareholder returns

STNEIndustryMarket
7 Day4.1%2.1%0.9%
30 Day-0.5%4.4%1.4%
90 Day19.0%14.1%8.8%
1 Year78.3%78.3%38.6%37.2%22.5%20.0%
3 Yearn/a111.6%102.4%49.9%40.3%
5 Yearn/a148.3%126.1%73.2%54.1%

Price Volatility Vs. Market

How volatile is StoneCo's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is StoneCo undervalued compared to its fair value and its price relative to the market?

73.97x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: STNE ($41.82) is trading above our estimate of fair value ($14.32)

Significantly Below Fair Value: STNE is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: STNE is poor value based on its PE Ratio (74x) compared to the IT industry average (33.1x).

PE vs Market: STNE is poor value based on its PE Ratio (74x) compared to the US market (18.4x).


Price to Earnings Growth Ratio

PEG Ratio: STNE is poor value based on its PEG Ratio (3.2x)


Price to Book Ratio

PB vs Industry: STNE is overvalued based on its PB Ratio (8.9x) compared to the US IT industry average (4.2x).


Next Steps

Future Growth

How is StoneCo forecast to perform in the next 1 to 3 years based on estimates from 12 analysts?

23.1%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: STNE's forecast earnings growth (23.1% per year) is above the savings rate (1.7%).

Earnings vs Market: STNE's earnings (23.1% per year) are forecast to grow faster than the US market (14.6% per year).

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: STNE's revenue (22.8% per year) is forecast to grow faster than the US market (7.6% per year).

High Growth Revenue: STNE's revenue (22.8% per year) is forecast to grow faster than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: STNE's Return on Equity is forecast to be high in 3 years time (20.6%)


Next Steps

Past Performance

How has StoneCo performed over the past 5 years?

319.1%

Last years earnings growth


Earnings and Revenue History

Quality Earnings: STNE has a high level of non-cash earnings.

Growing Profit Margin: STNE's current net profit margins (65.2%) are higher than last year (26.7%).


Past Earnings Growth Analysis

Earnings Trend: Insufficient data to determine if STNE's year-on-year earnings growth rate was positive over the past 5 years.

Accelerating Growth: Insufficient data to compare STNE's past year earnings growth to its 5-year average.

Earnings vs Industry: STNE earnings growth over the past year (319.1%) exceeded the IT industry 12%.


Return on Equity

High ROE: STNE's Return on Equity (11.8%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is StoneCo's financial position?


Financial Position Analysis

Short Term Liabilities: STNE's short term assets (R$15.9B) exceed its short term liabilities (R$8.8B).

Long Term Liabilities: STNE's short term assets (R$15.9B) exceed its long term liabilities (R$2.6B).


Debt to Equity History and Analysis

Debt Level: STNE's debt to equity ratio (91.2%) is considered high.

Reducing Debt: Insufficient data to determine if STNE's debt to equity ratio has reduced over the past 5 years.

Debt Coverage: STNE's operating cash flow is negative, therefore debt is not well covered.

Interest Coverage: Insufficient data to determine if STNE's interest payments on its debt are well covered by EBIT.


Balance Sheet

Inventory Level: STNE has a low level of unsold assets or inventory.

Debt Coverage by Assets: STNE's debt is covered by short term assets (assets are 3.1x debt).


Next Steps

Dividend

What is StoneCo's current dividend yield, its reliability and sustainability?

0.12%

Forecast Dividend Yield


Dividend Yield vs Market

companyn/amarketbottom25%1.4%markettop25%3.7%industryaverage1.2%forecastin3Years0.1%

Current dividend yield vs market & industry

Notable Dividend: Unable to evaluate STNE's dividend yield against the bottom 25% of dividend payers, as the company has not reported any payouts.

High Dividend: Unable to evaluate STNE's dividend yield against the top 25% of dividend payers, as the company has not reported any payouts.


Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if STNE's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if STNE's dividend payments have been increasing.


Current Payout to Shareholders

Dividend Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of STNE's dividend in 3 years as they are not forecast to pay a notable one for the US market.


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

2.1yrs

Average management tenure


CEO

Thiago dos Piau (30yo)

3.1yrs

Tenure

Mr. Thiago dos Santos Piau has been Chief Executive Officer of StoneCo Ltd. since 2017. Prior to 2017, Mr. Piau served as Chief Operations Officer of StoneCo Ltd. and also served as its Chief Financial Off ...


Leadership Team

NamePositionTenureCompensationOwnership
Thiago dos Piau
Chief Executive Officer3.1yrsno datano data
Augusto Barbosa Lins
President2.1yrsno data0.66% R$76.8m
Marcelo Baldin
Vice President of Finance2.1yrsno datano data
Felipe Bourrus
Chief Technology Officer2.1yrsno datano data
Rafael Pereira
Investor Relations Executive Officer2.1yrsno datano data
Vinícius do Carrasco
Chief Economist & Regulatory Affairs Executive Officer and Member of Advisory Board0yrsno datano data
Lia de Matos
Chief Strategy Officer4.1yrsno data0.0036% R$414.1k

2.1yrs

Average Tenure

36yo

Average Age

Experienced Management: STNE's management team is considered experienced (2.1 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 22.9%.


Top Shareholders

Company Information

StoneCo Ltd.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: StoneCo Ltd.
  • Ticker: STNE
  • Exchange: NasdaqGS
  • Founded: 2000
  • Industry: Data Processing and Outsourced Services
  • Sector: Software
  • Market Cap: US$11.599b
  • Shares outstanding: 277.37m
  • Website: https://www.stone.co

Number of Employees


Location

  • StoneCo Ltd.
  • R. Fidêncio Ramos, 308
  • 10th floor
  • São Paulo
  • São Paulo
  • 04551-010
  • Brazil

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
STNENasdaqGS (Nasdaq Global Select)YesClass A Common SharesUSUSDOct 2018
0Q0DB (Deutsche Boerse AG)YesClass A Common SharesDEEUROct 2018

Biography

StoneCo Ltd. provides financial technology solutions that empower 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 of December 31, 2018, the company served approximately 267,000 clients, which included digital, and brick-and-mortar merchants, primarily small-and-medium-sized businesses; and 108 integrated partners, such as global payment service providers, digital marketplaces, and integrated software vendors. The company was founded in 2000 and is headquartered in São Paulo, Brazil. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/18 01:23
End of Day Share Price2020/02/14 00:00
Earnings2019/09/30
Annual Earnings2018/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.