STNE - StoneCo Q1 2024 Earnings: So It Is A Bank

2024-05-14 06:22:40 ET

Summary

• StoneCo's recent performance reveals a transition towards a banking model, indicating increased exposure to credit risk.
• It's essential to recognize the shift in StoneCo's fundamental nature and its implications for valuation multiples and growth prospects.
• Difficult to be bullish on this bank.

Investment Thesis

StoneCo ( STNE ) delivered Q1 2024 results that had many of the same elements as prior quarters. This is a beautiful story for investors who want exposure to Brazil's underbanked population. However, a beautiful story can trick some of the people for some of the time. However, after a while, investors like to check in on the fundamentals. And as we check in on StoneCo, the picture doesn't quite dazzle as strongly as it once did....

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