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StoneCo (STNE) Q1 Earnings Lag Estimates, Revenues Rise Y/Y

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StoneCo’s STNE first-quarter fiscal 2021 non-GAAP earnings of 9 cents per share missed the Zacks Consensus Estimate by 43.8%. In domestic currency, earnings were R$0.60 per share, growing 5.3% year over year.

Moreover, revenues and income of $159 million surpassed the consensus mark by 2.3%. In domestic currency, revenues increased 21.1% year over to R$867.7 million.

Quarter Details

Net revenues from transaction activities and other services jumped 40% year over year to R$318.3 million. The year-over-year growth was driven by strong Total Payment Volume (TPV) growth.

StoneCo Ltd. Price, Consensus and EPS Surprise

StoneCo Ltd. Price, Consensus and EPS Surprise
StoneCo Ltd. Price, Consensus and EPS Surprise

StoneCo Ltd. price-consensus-eps-surprise-chart | StoneCo Ltd. Quote

Net revenues from subscription services and equipment rentals surged 50.3% year over year to R$139.9 million.

Financial income was R$368.8 million, up 2.6% from the year-ago quarter. Other financial income increased 9.8% year over year to R$40.6 million.

Markedly, StoneCo reached an active client base of 722,300, up 34.5% year over year, in the reported quarter. The company added 60,200 customers in the quarter, driven by growth in every Brazilian state despite the second wave of COVID-19. StoneCo added 62,400 small and medium businesses in the same time period.

TPV was R$51 billion, up 35.5% year over year.

Administrative expenses as a percentage of revenues increased 320 bps year over year to 13.6%.

Moreover, selling expenses as a percentage of revenues decreased 320 bps on a year-over-year basis to 18.8%.

Balance Sheet & Cash Flow

As of Mar 31, 2021, StoneCo’s cash & cash equivalents were R$10.54 billion compared with R$10.58 billion as of Dec 31, 2021.

Operating cash outflow was R$89.2 million compared with R$362.5 million reported in the year-ago quarter.

Free cash outflow was R$465.7 million against free cash flow of R$250.3 million reported in the previous quarter.


For fiscal 2022, StoneCo expects to report between 1.4 million and 1.5 million active clients in payments.

Take Rate (ex-Coronavoucher) is expected to be between 1.85% and 2.00% for the full year.

Moreover, total revenues and income are expected to see significant acceleration from 2020 growth level.

Zacks Rank & Stocks to Pick

StoneCo has a Zacks Rank #3 (Hold).

Cambium Networks CMBM, Facebook FB and Lam Research LRCX, all sporting a Zacks Rank #1 (Strong Buy), are stocks worth considering in the broader technology sector. You can see the complete list of today’s Zacks #1 Rank stocks here.

Long-term earnings growth rate for Cambium, Facebook and Lam Research is pegged at 20%, 20.1% and 32.8%, respectively.

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