StoneCo Ltd.
StoneCo Ltd. Fundamental Analysis
StoneCo Ltd. (STNE) shows strong financial fundamentals with a PE ratio of 8.12, profit margin of 21.13%, and ROE of 19.67%. The company generates $11.2B in annual revenue with strong year-over-year growth of 12.10%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 57.2/100 based on profitability, valuation, growth, and balance sheet metrics. The C grade reflects average fundamentals, with notable risks in certain areas.
Fundamental Health Score
We analyze STNE's fundamental strength across five key dimensions:
Efficiency Score
WeakSTNE struggles to generate sufficient returns from assets.
Valuation Score
ExcellentSTNE trades at attractive valuation levels.
Growth Score
ModerateSTNE shows steady but slowing expansion.
Financial Health Score
ModerateSTNE shows balanced financial health with some risks.
Profitability Score
ModerateSTNE maintains healthy but balanced margins.
Key Financial Metrics
Is STNE Expensive or Cheap?
P/E Ratio
STNE trades at 8.12 times earnings. This suggests potential undervaluation.
PEG Ratio
When adjusting for growth, STNE's PEG of 0.00 indicates potential undervaluation.
Price to Book
The market values StoneCo Ltd. at 1.58 times its book value. This may indicate undervaluation.
EV/EBITDA
Enterprise value stands at 1.28 times EBITDA. This is generally considered low.
How Well Does STNE Make Money?
Net Profit Margin
For every $100 in sales, StoneCo Ltd. keeps $21.13 as profit after all expenses.
Operating Margin
Core operations generate 38.60 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $19.67 in profit for every $100 of shareholder equity.
ROA
StoneCo Ltd. generates $3.67 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
StoneCo Ltd. generates limited operating cash flow of $776.38M, signaling weaker underlying cash strength.
Free Cash Flow
StoneCo Ltd. generates weak or negative free cash flow of $-200.35M, restricting financial flexibility.
FCF Per Share
Each share generates $-0.76 in free cash annually.
FCF Yield
STNE converts -1.00% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
8.12
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
0.004
vs 25 benchmark
P/B Ratio
Price to book value ratio
1.58
vs 25 benchmark
P/S Ratio
Price to sales ratio
1.78
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
1.49
vs 25 benchmark
Current Ratio
Current assets to current liabilities
1.30
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.20
vs 25 benchmark
ROA
Return on assets percentage
0.04
vs 25 benchmark
ROCE
Return on capital employed
0.19
vs 25 benchmark
How STNE Stacks Against Its Sector Peers
| Metric | STNE Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 8.12 | 34.43 | Better (Cheaper) |
| ROE | 19.67% | 1135.00% | Weak |
| Net Margin | 21.13% | -134663.00% (disorted) | Strong |
| Debt/Equity | 1.49 | 7.92 | Strong (Low Leverage) |
| Current Ratio | 1.30 | 5.77 | Neutral |
| ROA | 3.67% | -310462.00% (disorted) | Weak |
STNE outperforms its industry in 3 out of 6 key metrics, particularly excelling in Net Margin, but lagging in ROE.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews StoneCo Ltd.'s 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
390.04%
Industry Style: Growth, Innovation, High Beta
High GrowthEPS CAGR
-273.40%
Industry Style: Growth, Innovation, High Beta
DecliningFCF CAGR
-25.53%
Industry Style: Growth, Innovation, High Beta
Declining