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Thursday, November 29, 2018

StoneCo (STNE) reported earnings on Mon 26 Nov 18 (a/h)

  • Other top payments stocks: Visa (V), Mastercard (MA), PayPal (PYPL), Square (SQ) 
  • Recent Brazilian IPO
** chart 3 days after earnings **




Warren Buffett-Backed IPO Reports Adjusted Earnings Jump Of 1,467%

Brazilian fintech firm StoneCo (STNE), which counts Warren Buffett as a backer, reported adjusted earnings soared in Q3, in its first report since an October IPO.

StoneCo Earnings
Estimates: Wall Street expects the Brazilian credit-card processor's earnings per share come in at 11 cents, according to Zacks Investment Research. Revenue estimates are not available.

Results: Adjusted net income soared to 89.3 million Brazilian reais from 5.7 million a year ago. Revenue jumped 121.4% to 414.1 million Brazilian reais. As of Sept. 30, StoneCo had 234,400 thousand active clients, up 127% from a year ago. Payment volume surged 84% to 21.8 billion Brazilian reais.

"Our performance so far in the fourth quarter 2018 in terms of growth, operational leverage, profitability and take rate has been strong and on track," StoneCo said in a statement. "The Company's strategy of having the best customer experience, a disciplined execution and being very close to the clients has been paying off."

Warren Buffett Backs StoneCo
StoneCo stock has high-pedigree backing, with Warren Buffett's Berkshire Hathaway (BRKB) revealing that it owns 14.2 million shares of the Brazilian financial technology firm. This amounts to an 11.3% stake in the company. The position was taken when the firm went public Oct. 25.

Berkshire is not known for its financial or tech investments, however this may be changing. It also invested in Paytm, India's largest mobile-payments service, in August.

StoneCo touts itself as a leading provider of financial technology solutions in its native Brazil. Its products help merchants and partners conduct e-commerce in-store, online, and through mobile channels. It competes with fellow Brazilian stock PagSeguro (PAGS), which was recently listed among the IPO Leaders list and reports Thursday.

StoneCo is planning to use the proceeds from its stock market IPO for mergers, acquisitions and working capital. In addition, it is planning to offer banking services and start a loyalty program.

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