Critical Analysis: StoneCo (NASDAQ:STNE) & Its Competitors

StoneCo (NASDAQ: STNE) is one of 68 publicly-traded companies in the “Data processing & preparation” industry, but how does it compare to its peers? We will compare StoneCo to related companies based on the strength of its dividends, profitability, institutional ownership, earnings, analyst recommendations, risk and valuation.

Insider & Institutional Ownership

33.2% of StoneCo shares are owned by institutional investors. Comparatively, 54.3% of shares of all “Data processing & preparation” companies are owned by institutional investors. 20.3% of shares of all “Data processing & preparation” companies are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Analyst Recommendations

This is a summary of recent ratings for StoneCo and its peers, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
StoneCo 0 3 2 0 2.40
StoneCo Competitors 490 2029 2854 140 2.48

StoneCo presently has a consensus price target of $33.92, suggesting a potential upside of 27.95%. As a group, “Data processing & preparation” companies have a potential upside of 6.04%. Given StoneCo’s higher possible upside, equities analysts clearly believe StoneCo is more favorable than its peers.

Valuation and Earnings

This table compares StoneCo and its peers top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Net Income Price/Earnings Ratio
StoneCo $414.74 million N/A 80.33
StoneCo Competitors $1.29 billion $83.76 million -46.94

StoneCo’s peers have higher revenue and earnings than StoneCo. StoneCo is trading at a higher price-to-earnings ratio than its peers, indicating that it is currently more expensive than other companies in its industry.

Profitability

This table compares StoneCo and its peers’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
StoneCo N/A N/A N/A
StoneCo Competitors -40.06% -2,459.55% -9.83%

Summary

StoneCo peers beat StoneCo on 6 of the 11 factors compared.

StoneCo Company Profile

StoneCo Ltd. engages in the provision of financial technology solutions. It caters to merchants and partners that conduct electronic commerce across in-store, online, and mobile channels. It offers cloud-based technology platform, electronic payments, and automation of business processes at the point-of-sale. The company was founded on March 11, 2014 and is headquartered in São Paulo, Brazil.

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