STNE - StoneCo: You Get The Banking Business For Free Now

2024-05-16 08:55:24 ET

Summary

• Brazilian FinTech StoneCo's stock dropped 10% after reporting lower-than-expected revenue and EBIT, but the company remains on track to exceed its guidance for the year.
• StoneCo's customer base growth rate is slowing down, with only 200k new customers registering last quarter.
• Costs have gone up because of one-off marketing expenses.
• StoneCo's credit division is performing exceptionally well. Increasing borrowers and volume will drive future profits. Even more so when the loan loss provision rate will be adjusted downwards.
• At the current price, you get this credit division for free.

Brazilian FinTech StoneCo ( STNE ) has dropped 10% since it reported a top- and bottom-line that were both lower than expected. Is this dip a buy opportunity, or does it foreshadow further pain? Let's investigate....

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