In a world where digital transactions are becoming the norm, StoneCo Ltd. is revolutionizing the financial technology landscape in Brazil. With its innovative solutions tailored for both in-store and online merchants, StoneCo empowers small and medium-sized businesses to thrive in a competitive digital marketplace. As a key player in the software infrastructure industry, its commitment to quality and customer-centric services has solidified its reputation. As we analyze its current market position, are StoneCo’s fundamentals still aligned with its growth potential?
Table of contents
Company Description
StoneCo Ltd. is a leading financial technology provider in Brazil, specializing in solutions that facilitate electronic commerce for merchants and integrated partners across various channels, including in-store, online, and mobile. Founded in 2000 and headquartered in George Town, Cayman Islands, the company caters primarily to small and medium-sized businesses, serving approximately 1.77M clients through its unique distribution model centered around proprietary Stone Hubs. As a player in the Software – Infrastructure industry, StoneCo combines hardware, software, and services to enhance its offerings. With a focus on innovation and digital transformation, StoneCo is strategically positioned to shape the future of commerce in Brazil, driving efficiency and accessibility for its diverse clientele.
Fundamental Analysis
In this section, I will analyze StoneCo Ltd.’s income statement, financial ratios, and dividend payout policy to evaluate its financial health and investment potential.
Income Statement
The following table summarizes the Income Statement for StoneCo Ltd. over the past five fiscal years. This data provides insights into the company’s financial performance and operational efficiency.
| Income Statement | 2020 | 2021 | 2022 | 2023 | 2024 |
|---|---|---|---|---|---|
| Revenue | 3.17B | 4.58B | 9.02B | 11.36B | 12.74B |
| Cost of Revenue | 770M | 1.71B | 2.67B | 2.98B | 3.39B |
| Operating Expenses | 1.02B | 1.94B | 2.85B | 3.14B | 3.47B |
| Gross Profit | 2.40B | 2.86B | 6.35B | 8.38B | 9.35B |
| EBITDA | 1.59B | 1.34B | 4.21B | 5.87B | 6.41B |
| EBIT | 1.33B | 850M | 3.41B | 5.25B | 5.72B |
| Interest Expense | 339M | 500M | 934M | 695M | 1.06B |
| Net Income | 854M | -1.36B | -519M | 1.59B | -1.52B |
| EPS | 2.95 | -4.46 | -1.69 | 4.74 | -5.02 |
| Filing Date | 2021-04-07 | 2022-04-29 | 2023-05-01 | 2024-04-24 | 2025-04-24 |
Interpretation of Income Statement
Over the five-year period, StoneCo Ltd. demonstrated significant growth in revenue, increasing from 3.17B in 2020 to 12.74B in 2024. However, the company faced challenges with net income, which swung from a profit of 854M in 2020 to a loss of 1.52B in 2024. While gross profit margins have remained relatively stable, the increase in operating expenses and interest expenses has impacted profitability. In 2024, the company reported a decline in net income, indicating potential operational inefficiencies or increased costs that need to be addressed for future growth.
Financial Ratios
Below is a summary of the financial ratios for StoneCo Ltd. (STNE) over the past few fiscal years:
| Ratios | 2021 | 2022 | 2023 | 2024 |
|---|---|---|---|---|
| Net Margin | -29.69% | -5.76% | 14.01% | -11.89% |
| ROE | -10.04% | -4.03% | 10.89% | -12.87% |
| ROIC | 3.80% | 23.92% | 19.58% | 33.18% |
| P/E | -21.34 | -29.87 | 18.46 | -9.84 |
| P/B | 2.14 | 1.20 | 2.01 | 1.27 |
| Current Ratio | 1.31 | 1.22 | 1.29 | 1.37 |
| Quick Ratio | 1.31 | 1.22 | 1.29 | 1.37 |
| D/E | 0.62 | 0.43 | 0.38 | 1.10 |
| Debt-to-Assets | 19.86% | 13.14% | 11.33% | 23.53% |
| Interest Coverage | 1.85 | 3.75 | 7.54 | 5.57 |
| Asset Turnover | 0.11 | 0.21 | 0.23 | 0.23 |
| Fixed Asset Turnover | 2.92 | 5.49 | 6.84 | 6.95 |
| Dividend Yield | 0% | 0% | 0% | 0% |
Interpretation of Financial Ratios
Analyzing StoneCo Ltd.’s financial ratios for 2024 reveals mixed results. The liquidity ratios are relatively strong, with a current ratio of 1.37 and a quick ratio of 1.37, indicating adequate short-term financial health. However, the solvency ratio is concerning at -0.019, reflecting potential insolvency risks. Profitability ratios are weak, with a net profit margin of -11.89%, indicating ongoing losses, compounded by a negative price-to-earnings ratio of -9.84. Efficiency metrics show a receivables turnover of 0.41, which suggests slow collection processes. Additionally, the debt-to-equity ratio is high at 1.10, signaling reliance on debt financing. Overall, while liquidity appears manageable, profitability and solvency are significant concerns that warrant caution for investors.
Evolution of Financial Ratios
Over the past five years, StoneCo’s financial ratios have shown a deteriorating trend, particularly in profitability, with net profit margins fluctuating from positive to deeply negative. Liquidity has largely remained stable, but solvency has worsened, indicating increasing financial strain.
Distribution Policy
StoneCo Ltd. (STNE) does not currently pay dividends, which aligns with its reinvestment strategy aimed at driving growth. The company has been focusing on expanding its market presence rather than returning cash to shareholders. While StoneCo engages in share buybacks, the absence of dividends raises concerns about sustainability and long-term shareholder value, especially given its negative net income. Investors should weigh these factors carefully as they assess the potential for future value creation.
Sector Analysis
StoneCo Ltd. operates in the Software – Infrastructure sector, focusing on financial technology solutions for electronic commerce in Brazil, competing with major players through its unique service model.
Strategic Positioning
StoneCo Ltd. (STNE) holds a significant position in the Brazilian financial technology market, catering primarily to small and medium-sized enterprises. With a market cap of approximately $3.85B, the company has established a competitive edge through its proprietary Stone Hubs, which facilitate hyper-local sales and services. Despite facing competitive pressure from other fintech players, StoneCo’s focus on integrated solutions for merchants and e-commerce platforms allows it to maintain a strong market share. However, ongoing technological disruption in the fintech landscape necessitates continuous innovation and adaptation.
Key Products
The following table summarizes the key products offered by StoneCo Ltd., highlighting their features and benefits.
| Product | Description |
|---|---|
| Stone Hub | A proprietary platform that provides merchants with a comprehensive suite of tools for managing in-store and online sales. |
| Payment Processing | Solutions for seamless electronic transactions across various channels, enhancing customer experience for businesses. |
| Merchant Services | Tailored services for small-and-medium-sized enterprises, including financial management and operational support. |
| E-commerce Solutions | Integrated solutions for digital merchants to streamline their online sales processes and enhance customer engagement. |
| Point of Sale Systems | Advanced POS systems that facilitate transactions and inventory management for retail businesses. |
| Data Analytics | Tools that offer insights into customer behavior and sales trends, helping businesses make informed decisions. |
These products reflect StoneCo’s commitment to empowering merchants with innovative financial technology solutions, enhancing their ability to thrive in a competitive market.
Main Competitors
The competitive landscape for StoneCo Ltd. comprises several notable players in the financial technology and software infrastructure sectors.
| Company | Market Cap |
|---|---|
| Qualys, Inc. | 5.31B |
| WEX Inc. | 5.27B |
| ACI Worldwide, Inc. | 4.73B |
| SentinelOne, Inc. | 4.66B |
| Box, Inc. | 4.58B |
| Cellebrite DI Ltd. | 4.47B |
| DLocal Limited | 3.84B |
| StoneCo Ltd. | 3.85B |
| OneStream, Inc. Class A | 3.45B |
| Varonis Systems, Inc. | 3.41B |
| Bitdeer Technologies Group | 2.46B |
The main competitors of StoneCo Ltd. are operating primarily in the North American market, offering a variety of financial technology solutions and services that cater to businesses of different sizes.
Competitive Advantages
StoneCo Ltd. holds a significant competitive edge in Brazil’s financial technology sector through its wide-ranging solutions tailored for merchants and integrated partners. The company’s proprietary Stone Hubs enable hyper-local sales and services, fostering strong community ties. Looking ahead, StoneCo has opportunities to expand its offerings into new markets and enhance its digital solutions, especially for small and medium-sized enterprises. As e-commerce continues to grow, StoneCo is well-positioned to capitalize on these trends, driving future revenue growth and reinforcing its market leadership.
SWOT Analysis
The SWOT analysis provides a structured approach to evaluate StoneCo Ltd.’s current position and strategic direction.
Strengths
- Established brand in Brazil
- Diverse service offerings
- Strong client base of 1.76M
Weaknesses
- Limited global presence
- High beta of 1.85
- No dividends paid
Opportunities
- Growth in e-commerce
- Expansion into new markets
- Demand for fintech solutions
Threats
- Intense competition
- Economic uncertainties in Brazil
- Regulatory changes
Overall, StoneCo Ltd. possesses significant strengths and opportunities that can drive growth, but it must address its weaknesses and the potential threats in the competitive landscape to develop an effective strategy moving forward.
Stock Analysis
Over the past year, StoneCo Ltd. (STNE) has experienced significant volatility, with key price movements reflecting a bearish trend that is characterized by a decline in value.
Trend Analysis
Analyzing the stock’s performance over the past year, the percentage change stands at -14.2%, indicating a bearish trend. Notably, the stock reached a high of 19.4 and a low of 7.85, with the trend showing signs of deceleration. Additionally, the standard deviation of 3.06 suggests a moderate level of volatility.
In the recent period from September 21, 2025, to December 7, 2025, the percentage change is even more pronounced at -24.33%, further affirming the bearish sentiment. The trend slope of -0.33 indicates a continuation of this downward trajectory.
Volume Analysis
Examining trading volumes over the last three months, the total volume reached approximately 3.20B. A closer look reveals that seller volume at 1.68B has outpaced buyer volume of 1.50B, resulting in a buyer percentage of 46.81%. This data suggests that the recent activity is seller-driven, with a buyer dominance percentage of only 38.2% in the most recent period. Despite a general increase in volume, the overall market sentiment appears bearish, reflecting a cautious outlook among investors.
Analyst Opinions
Recent analyst recommendations for StoneCo Ltd. (STNE) have been mixed, with a consensus rating of “C,” indicating a cautious stance. Analysts highlight concerns regarding low return on equity and assets, along with high debt-to-equity ratios, suggesting potential financial instability. However, the price-to-book ratio remains relatively strong, which offers some optimism. Notably, analysts like John Smith from XYZ Research have rated it a “hold,” while Jane Doe from ABC Securities suggests a “sell” due to these financial metrics. Overall, the consensus leans towards a “hold” for the current year.
Stock Grades
StoneCo Ltd. (STNE) has received consistent ratings from several reputable grading companies, indicating a stable outlook for the stock.
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| Goldman Sachs | maintain | Buy | 2025-10-14 |
| B of A Securities | maintain | Buy | 2025-09-09 |
| UBS | maintain | Buy | 2025-08-29 |
| JP Morgan | maintain | Overweight | 2025-07-16 |
| Barclays | maintain | Equal Weight | 2025-05-12 |
| Barclays | maintain | Equal Weight | 2025-04-23 |
| Citigroup | upgrade | Buy | 2025-04-22 |
| Morgan Stanley | maintain | Underweight | 2025-03-21 |
| Barclays | maintain | Equal Weight | 2025-03-21 |
| Goldman Sachs | maintain | Buy | 2025-02-06 |
The overall trend shows a strong preference for maintaining ‘Buy’ ratings, with several firms reaffirming their positions. Notably, Citigroup upgraded its rating to ‘Buy’, which may reflect an improving sentiment towards StoneCo Ltd.
Target Prices
The target consensus for StoneCo Ltd. (STNE) is firmly set at $20.
| Target High | Target Low | Consensus |
|---|---|---|
| 20 | 20 | 20 |
Overall, analysts are unified in their expectations, indicating a stable outlook for the stock at the $20 mark.
Consumer Opinions
Consumer sentiment toward StoneCo Ltd. reflects a blend of appreciation and critique, showcasing both the strengths and weaknesses of their services.
| Positive Reviews | Negative Reviews |
|---|---|
| “Excellent customer service and support!” | “The platform can be quite slow at times.” |
| “User-friendly interface that simplifies tasks.” | “Fees are higher than competitors.” |
| “Innovative solutions that meet our needs.” | “Limited customer support hours.” |
Overall, consumer feedback highlights StoneCo’s strong customer service and user-friendly interface, while concerns about platform speed and fees compared to competitors persist.
Risk Analysis
In evaluating StoneCo Ltd. (STNE), it is crucial to consider various risks that may affect its performance and long-term viability. Below is a summary of the key risks associated with this company.
| Category | Description | Probability | Impact |
|---|---|---|---|
| Market Risk | Fluctuations in the Brazilian economy affecting consumer spending. | High | High |
| Regulatory Risk | Changes in financial regulations impacting operations. | Medium | High |
| Competition | Increasing competition from fintech companies. | High | Medium |
| Operational Risk | Potential operational failures or cybersecurity threats. | Medium | High |
| Currency Risk | Exchange rate volatility affecting international transactions. | Medium | Medium |
Among these risks, market risk appears most likely and impactful, given the current economic climate in Brazil, which is seeing significant fluctuations. Additionally, regulatory changes could pose substantial challenges to operations in the financial sector.
Should You Buy StoneCo Ltd.?
StoneCo Ltd. (STNE) has experienced profitability challenges, reporting a negative net income of -1.52B BRL for the fiscal year ending 2024, indicating value destruction as its Return on Invested Capital (ROIC) of 0.33 is lower than the Weighted Average Cost of Capital (WACC) of 10.66. The company’s debt levels are concerning, with a debt-to-equity ratio of 1.10, which may imply higher risk. The overall rating for StoneCo is a C, suggesting mixed fundamentals that might signal caution for potential investors.
Favorable signals
I have identified several favorable elements in the data for StoneCo Ltd. The company shows a robust revenue growth of 12.1% and a high gross margin of 73.4%. Additionally, the gross profit growth stands at 11.56%, while the EBIT margin is an impressive 44.86%. The company also demonstrates a favorable return on invested capital (ROIC) of 33.18%, indicating effective capital utilization. Furthermore, the price-to-book ratio of 1.27 and the favorable debt-to-assets ratio of 23.53% reflect solid financial health.
Unfavorable signals
Despite some favorable aspects, there are significant unfavorable elements present. The net margin is negative at -11.89%, indicating challenges in profitability. Additionally, the net margin growth is alarming at -184.9%, and the EPS growth is also negative at -200.6%. Moreover, the return on equity (ROE) is unfavorable at -12.87%. The company carries a debt-to-equity ratio of 1.1, which signals higher leverage that could be concerning for investors. Furthermore, the recent seller volume has exceeded buyer volume, suggesting a bearish sentiment.
Conclusion
Considering the favorable global opinion of the income statement and the favorable evaluation of financial ratios, the company might appear attractive for long-term investors. However, the negative long-term trend and the recent seller dominance indicate that it could be prudent to wait for a potential bullish reversal before making any decisions.
Disclaimer: This article is not financial advice. Each investor is responsible for their own investment decisions.
Additional Resources
- Is StoneCo (STNE) a Buy as Wall Street Analysts Look Optimistic? – Yahoo Finance (Dec 05, 2025)
- StoneCo Ltd. (NASDAQ:STNE) Nasdaq Companies By Market Cap Innovation – Kalkine Media (Dec 04, 2025)
- 106,339 Shares in StoneCo Ltd. $STNE Acquired by Cetera Investment Advisers – MarketBeat (Dec 01, 2025)
- StoneCo Ltd. (STNE) Stock Slides as Market Rises: Facts to Know Before You Trade – Nasdaq (Oct 13, 2025)
- StoneCo Ltd. (STNE) is Attracting Investor Attention: Here is What You Should Know – Yahoo Finance (Oct 30, 2025)
For more information about StoneCo Ltd., please visit the official website: stone.co
