Company Overview
StoneCo Ltd. operates within the Technology sector, specifically focusing on the Software - Infrastructure industry, where it delivers financial technology and software solutions to merchants and integrated partners. The company facilitates electronic commerce across in-store, online, and mobile channels in Brazil by offering a suite of financial services that includes payment processing, prepayment mechanisms, digital banking, and credit solutions. As of the latest data, the company commands a market capitalization of $3.63B and generates annual revenue of $13.40B, while its employee count is listed as N/A. These valuation and revenue figures indicate that StoneCo holds a significant position in its operational landscape, managing substantial capital and revenue streams relative to its peer group in the fintech infrastructure space.
Financial Health
The company reported revenue of $13.40B for the trailing twelve months, with a corresponding net income of $2.36B and EBITDA of $7.25B. The substantial gap between the $13.40B revenue and the $2.36B net income reveals a cost structure where operating expenses and taxes consume approximately 82.7% of total revenue, leaving a profit margin of 17.3%. StoneCo reports free cash flow of $-3,481,750,528, which indicates a current period of capital expenditure or working capital intensity that consumes generated cash, suggesting limited short-term financial flexibility for internal reinvestment without external funding. The gross margin stands at 74.9%, reflecting high efficiency in delivering core software and infrastructure services before operating expenses. The operating margin of 46.3% demonstrates strong control over operational costs relative to revenue, while the profit margin of 17.3% confirms the final profitability after all expenses and taxes. On the balance sheet, the company holds $5.94B in cash against $17.58B in debt, resulting in a debt-to-equity ratio of 159.33, which characterizes a highly leveraged position rather than a conservative one. The current ratio is 1.37, indicating that the company has sufficient current assets to cover its short-term liabilities, though the buffer is relatively narrow. Return on Equity is 20.8% and Return on Assets is 7.0%, metrics that reveal management is generating high returns on shareholder equity while maintaining moderate returns on the total asset base.
Valuation Assessment
The trailing twelve-month P/E ratio is 7.21, while the forward P/E is 5.83, implying that the market expects earnings growth that would allow the current low valuation to compress further in the future. The price-to-book ratio is 1.65, indicating that the market values the company at a premium of 65% over its net asset book value. Alternative valuation metrics such as the price-to-sales ratio of 0.27 and the EV/EBITDA of 2.09 suggest the company is trading at a discount relative to its sales and earnings generation capabilities. The stock has a 52-week high of $19.95 and a 52-week low of $9.83, and based on the provided data points, the stock is trading within a range defined by these extremes. The beta value is 1.88, which means the stock price is expected to exhibit significantly higher volatility than the broader market, moving 88% more than the benchmark in a given period.
Growth & Income
StoneCo Ltd. reported a revenue growth rate of 11.2% year-over-year, while the earnings growth rate is listed as N/A, preventing a direct comparison of earnings speed relative to revenue in this specific reporting period. The company does not pay a dividend, as indicated by a dividend yield of N/A and a payout ratio of 0.0%. Consequently, the company reinvests its earnings and cash flows into growth initiatives rather than distributing income to shareholders. This reinvestment strategy is typical for technology infrastructure firms in expansion phases, prioritizing market share and capability building over immediate income distribution. The overall growth and income profile is defined by robust revenue expansion without current dividend support, relying entirely on capital appreciation potential driven by the 11.2% revenue increase and the underlying profitability metrics.