StoneCo Reports Strong Quarterly Revenues; Shares Drop

StoneCo Ltd. (STNE), a financial technology and software solutions provider, has posted strong third-quarter 2021 revenues. Meanwhile, shares of the company declined 10.3% in the extended trading session on Tuesday due to lower year-over-year growth in some metrics.

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Results in Detail

StoneCo’s third-quarter adjusted EPS came in at R$0.46, down 53.7% from R$0.99 per share in the same quarter last year. Adjusted pre-tax income stood at R$128.7 million, down 69.6%.

Total revenues of R$1.47 billion advanced 57.3% from the year-ago period. Additionally, consolidated software revenue was R$315 million, up significantly from R$19 million in the prior-year quarter. (See StoneCo stock charts on TipRanks)

While the company’s Total Payment Value (TPV) stood at R$75 billion, up 7.6% year-over-year, total Active Payment Clients surged 111.8% to 1.39 million.

Markedly, the TPV growth was driven by both SMBs and micromerchant segments, with SMBs reflecting a rise of 70.3% year-over-year and micromerchants increasing their TPV 22.8x year-over-year.

The Linx deal closed on July 1, and the company’s software business has gained significant scale and share in the retail software market in Brazil. Together, Linx and StoneCo record a software client base of over 200,000 clients across different verticals and value-added solutions.

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Wall Street’s Take

The Street has a Strong Buy consensus rating based on 7 unanimous Buys. The average StoneCo price target of $73.86 implies 133.29% upside potential from current levels.

Investors’ Holdings

TipRanks’ Stock Investors tool shows that investors currently have a Very Positive stance on StoneCo with 1.6% of investors maintaining portfolios on TipRanks increasing their exposure to STNE stock over the past 30 days.