NasdaqGS:STNE

Stock Analysis Report

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Executive Summary

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


Snowflake Analysis

Exceptional growth potential with acceptable 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's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

5.7%

STNE

4.3%

US IT

4.0%

US Market


1 Year Return

36.7%

STNE

15.3%

US IT

5.0%

US Market

Return vs Industry: STNE exceeded the US IT industry which returned 15.3% over the past year.

Return vs Market: STNE exceeded the US Market which returned 4.9% over the past year.


Shareholder returns

STNEIndustryMarket
7 Day5.7%4.3%4.0%
30 Day2.2%1.8%-1.1%
90 Day80.4%28.8%21.1%
1 Year36.7%36.7%16.4%15.3%7.2%5.0%
3 Yearn/a100.9%92.7%36.0%27.1%
5 Yearn/a148.8%127.8%65.3%46.9%

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?

29.9%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: STNE ($40.11) is trading below our estimate of fair value ($57.22)

Significantly Below Fair Value: STNE is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: STNE is poor value based on its PE Ratio (75.5x) compared to the IT industry average (28.5x).

PE vs Market: STNE is poor value based on its PE Ratio (75.5x) compared to the US market (16.5x).


Price to Earnings Growth Ratio

PEG Ratio: STNE is poor value based on its PEG Ratio (2.6x)


Price to Book Ratio

PB vs Industry: STNE is overvalued based on its PB Ratio (9.5x) compared to the US IT industry average (3.5x).


Next Steps

Future Growth

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

29.0%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: STNE's forecast earnings growth (29% per year) is above the savings rate (2.2%).

Earnings vs Market: STNE's earnings (29% per year) are forecast to grow faster than the US market (22.8% per year).

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

Revenue vs Market: STNE's revenue (27.5% per year) is forecast to grow faster than the US market (9.2% per year).

High Growth Revenue: STNE's revenue (27.5% 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 (20.2%)


Next Steps

Past Performance

How has StoneCo performed over the past 5 years?

94.5%

Historical annual 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 (66.4%) are higher than last year (54.3%).


Past Earnings Growth Analysis

Earnings Trend: STNE's earnings have grown significantly by 94.5% per year over the past 5 years.

Accelerating Growth: STNE's earnings growth over the past year (72.1%) is below its 5-year average (94.5% per year).

Earnings vs Industry: STNE earnings growth over the past year (72.1%) exceeded the IT industry 14.5%.


Return on Equity

High ROE: STNE's Return on Equity (12.4%) is considered low.


Next Steps

Financial Health

How is StoneCo's financial position?


Financial Position Analysis

Short Term Liabilities: STNE's short term assets (R$17.3B) exceed its short term liabilities (R$10.2B).

Long Term Liabilities: STNE's short term assets (R$17.3B) exceed its long term liabilities (R$2.1B).


Debt to Equity History and Analysis

Debt Level: STNE's debt to equity ratio (96.8%) 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


Next Steps

Dividend

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

0.19%

Forecast Dividend Yield


Dividend Yield vs Market

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

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

2.5yrs

Average management tenure


CEO

Thiago dos Piau (30yo)

3.5yrs

Tenure

Mr. Thiago dos Santos Piau serves as an Independent Director of Cogna Educação S.A. He has been Chief Executive Officer of StoneCo Ltd. since 2017. Prior to 2017, Mr. Piau served as Chief Operations Office ...


Leadership Team

NamePositionTenureCompensationOwnership
Thiago dos Piau
Chief Executive Officer3.5yrsno datano data
Augusto Barbosa Lins
President2.5yrsno data0.63% R$69.7m
Marcelo Baldin
Vice President of Finance2.5yrsno datano data
Felipe Bourrus
Chief Technology Officer2.5yrsno datano data
Rafael Pereira
Investor Relations Executive Officer2.5yrsno datano data
Vinícius do Carrasco
Chief Economist & Regulatory Affairs Executive Officer and Member of Advisory Boardno datano datano data
Lia de Matos
Chief Strategy Officer4.5yrsno data0.0036% R$396.7k

2.5yrs

Average Tenure

37yo

Average Age

Experienced Management: STNE's management team is considered experienced (2.5 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Vinícius do Carrasco
Chief Economist & Regulatory Affairs Executive Officer and Member of Advisory Boardno datano datano data
Thomas Patterson
Director2.5yrsno datano data
Roberto Moses Motta
Independent Director2.5yrsno datano data
Carl Pascarella
Member of Advisory Boardno datano data0.27% R$29.9m
André Street
Chairman & Member of Advisory Boardno datano datano data
José Scheinkman
Member of Advisory Boardno datano datano data
Arminio Fraga Neto
Member of Advisory Boardno datano datano data
Jonas de Miranda Gomes
Member of Advisory Boardno datano datano data
Ali Zaynalabidin Mazanderani
Independent Director & Member of Advisory Board2.5yrsno datano data
Eduardo Cunha Monnerat de Pontes
Vice Chairman & Member of Advisory Boardno datano datano data

2.5yrs

Average Tenure

54yo

Average Age

Experienced Board: STNE's board of directors are not considered experienced ( 2.5 years average tenure), which suggests a new board.


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 not been meaningfully diluted in the past year.


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: 2012
  • Industry: Data Processing and Outsourced Services
  • Sector: Software
  • Market Cap: US$11.113b
  • Shares outstanding: 277.07m
  • Website: https://www.stone.co

Number of Employees


Location

  • StoneCo Ltd.
  • Harbour Place
  • 4th Floor
  • George Town
  • Grand Cayman
  • KY1-1002
  • Cayman Islands

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 to clients 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, 2019, the company served approximately 495,100 clients primarily small-and-medium-sized businesses; and 116 integrated partners, such as global payment service providers, digital marketplaces, and integrated software vendors. The company was founded in 2012 and is headquartered in George Town, Cayman Islands. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/07/05 23:49
End of Day Share Price2020/07/02 00:00
Earnings2020/03/31
Annual Earnings2019/12/31


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.