STNE - StoneCo: Growing Quickly And Trading Cheaply
2024-06-20 17:42:45 ET
Summary
- StoneCo is a Brazilian fintech company providing payment, software, and banking solutions for MSMBs.
- Despite recent volatility, StoneCo has undergone structural renewal and is projected to have over 30% CAGR in adjusted net income until 2027.
- StoneCo's business includes payments, software, and banking segments which create a strong ecosystem around the business services.
Investment Thesis:
StoneCo ( STNE ) is a Brazilian fintech company which provides solutions for MSMB's through the form of payments, software, and banking solutions. Stone has had a volatile few years with a meteoric rise after covid to a high of $90 a share, which was then met with a sharp collapse to a low of $9 a share after the mishandling of their credit segment and major losses with their investment in BancoIntern . As a result of the stock's collapse, the company underwent a complete structural renewal since then, which resulted in a new CEO being brought in and a re-launch of their credit segment. Looking forward, Stone has a phenomenal business model that is sticky among the businesses they work with as they can vertically integrate their payment solutions with the software and banking services they provide, which allows them to heavily monetize the customers they have and ensure it is extremely difficult for them to stop using their services. In addition, they are rapidly growing their business through expansions into new product segments and disrupting the traditional players in the sector, leading to management projecting an over 30% CAGR for their adjusted net income until 2027....
StoneCo: Growing Quickly And Trading Cheaply