StoneCo Ltd. (NASDAQ:STNE) last week reported its latest quarterly results, which makes it a good time for investors to dive in and see if the business is performing in line with expectations. Results were roughly in line with estimates, with revenues of R$3.7b and statutory earnings per share of R$1.84. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on StoneCo after the latest results.
We've discovered 1 warning sign about StoneCo. View them for free.
Taking into account the latest results, the current consensus from StoneCo's eleven analysts is for revenues of R$15.6b in 2025. This would reflect a meaningful 17% increase on its revenue over the past 12 months. Earnings are expected to improve, with StoneCo forecast to report a statutory profit of R$7.56 per share. In the lead-up to this report, the analysts had been modelling revenues of R$15.7b and earnings per share (EPS) of R$7.80 in 2025. The analysts seem to have become a little more negative on the business after the latest results, given the minor downgrade to their earnings per share numbers for next year.
Check out our latest analysis for StoneCo
It might be a surprise to learn that the consensus price target was broadly unchanged at US$15.15, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on StoneCo, with the most bullish analyst valuing it at US$18.18 and the most bearish at US$9.53 per share. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting StoneCo is an easy business to forecast or the the analysts are all using similar assumptions.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It's pretty clear that there is an expectation that StoneCo's revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 24% growth on an annualised basis. This is compared to a historical growth rate of 32% over the past five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 5.2% per year. Even after the forecast slowdown in growth, it seems obvious that StoneCo is also expected to grow faster than the wider industry.
The Bottom Line
The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. The consensus price target held steady at US$15.15, with the latest estimates not enough to have an impact on their price targets.
With that in mind, we wouldn't be too quick to come to a conclusion on StoneCo. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple StoneCo analysts - going out to 2027, and you can see them free on our platform here.
Before you take the next step you should know about the 1 warning sign for StoneCo that we have uncovered.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.