StoneCo (NASDAQ:STNE) Shares Gap Up on Earnings Beat

Key Points

• StoneCo Ltd. shares gapped up from a previous close of $13.50 to an opening price of $14.75, and were last traded at $14.30 with a volume of over 2.7 million shares.
• Analysts have recently upgraded their ratings on StoneCo, with Citigroup and JPMorgan raising their price targets to $15.00 and $18.50, respectively, while the stock holds a consensus rating of Moderate Buy.
• StoneCo reported a quarterly EPS of $0.34, surpassing analysts' expectations, although its revenue of $625.86 million was significantly below the forecast of $3.68 billion.

Shares of StoneCo Ltd. (NASDAQ:STNE - Get Free Report) gapped up prior to trading on Friday following a stronger than expected earnings report. The stock had previously closed at $13.50, but opened at $14.75. StoneCo shares last traded at $14.30, with a volume of 2,723,031 shares trading hands.

The company reported $0.39 earnings per share (EPS) for the quarter, topping analysts' consensus estimates of $0.36 by $0.03. StoneCo had a negative net margin of 8.37% and a positive return on equity of 18.71%. The company had revenue of $643.82 million during the quarter, compared to the consensus estimate of $3.78 billion.

Analyst Upgrades and Downgrades

STNE has been the topic of a number of research analyst reports. JPMorgan Chase & Co. increased their price objective on shares of StoneCo from $15.50 to $18.50 and gave the company an "overweight" rating in a research report on Wednesday, July 16th. Santander upgraded StoneCo from a "neutral" rating to an "outperform" rating in a research report on Wednesday, May 21st. Citigroup upgraded shares of StoneCo from a "neutral" rating to a "buy" rating and upped their price target for the company from $9.00 to $15.00 in a report on Tuesday, April 22nd. Barclays upped their target price on shares of StoneCo from $13.00 to $15.00 and gave the stock an "equal weight" rating in a research note on Monday, May 12th. Finally, Wall Street Zen cut shares of StoneCo from a "buy" rating to a "hold" rating in a research report on Friday, June 6th. One equities research analyst has rated the stock with a sell rating, two have assigned a hold rating, seven have assigned a buy rating and one has given a strong buy rating to the stock. According to data from MarketBeat, the stock has an average rating of "Moderate Buy" and an average target price of $15.07.

Hedge Funds Weigh In On StoneCo

Institutional investors and hedge funds have recently bought and sold shares of the company. Richardson Financial Services Inc. acquired a new position in StoneCo in the 2nd quarter valued at about $29,000. Farther Finance Advisors LLC raised its stake in shares of StoneCo by 334.4% in the 2nd quarter. Farther Finance Advisors LLC now owns 2,598 shares of the company's stock valued at $42,000 after acquiring an additional 2,000 shares during the period. GAMMA Investing LLC raised its stake in shares of StoneCo by 1,486.3% in the 1st quarter. GAMMA Investing LLC now owns 2,903 shares of the company's stock valued at $30,000 after acquiring an additional 2,720 shares during the period. CWM LLC raised its stake in shares of StoneCo by 327.4% in the 1st quarter. CWM LLC now owns 3,154 shares of the company's stock valued at $33,000 after acquiring an additional 2,416 shares during the period. Finally, Sterling Capital Management LLC raised its stake in shares of StoneCo by 627.0% in the 4th quarter. Sterling Capital Management LLC now owns 4,551 shares of the company's stock valued at $36,000 after acquiring an additional 3,925 shares during the period. 73.19% of the stock is currently owned by institutional investors and hedge funds.

StoneCo Stock Up 6.2%

The business's 50 day moving average price is $14.48 and its 200-day moving average price is $12.39. The firm has a market capitalization of $4.34 billion, a PE ratio of -21.70, a P/E/G ratio of 0.38 and a beta of 1.88. The company has a debt-to-equity ratio of 0.76, a quick ratio of 1.48 and a current ratio of 1.48.

StoneCo Company Profile

StoneCo Ltd. provides financial technology and software solutions to merchants and integrated partners to conduct electronic commerce across in-store, online, and mobile channels in Brazil. It distributes its solutions, principally through proprietary Stone Hubs, which offer hyper-local sales and services; and sells solutions to brick-and-mortar and digital merchants through sales team.