Why Did StoneCo Stock Crash Today?
Key Points
StoneCo reported an earnings beat last night, but its numbers can be hard to track down.
Earnings appear to have surged 17.5% in 2025, not even counting a big gain from an asset sale.
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Brazilian e-commerce software company StoneCo (NASDAQ: STNE) stock got crushed like chalk after reporting Q4 earnings last night, despite beating analyst forecasts. StoneCo was expected to earn 2.65 Brazilian reais (R$) per share in Q4, according to Yahoo! Finance, but actually earned R$2.84.
Nevertheless, as of 11:10 a.m. ET Tuesday, StoneCo stock is down 18.7%.
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StoneCo Q4 earnings
StoneCo's earnings reports can be tough to track down, but this one is found in a press release on the SEC website. There, we learn that StoneCo grew its sales from continuing operations 13% year over year to R$3.7 billion in Q4, with total earnings of R$706.9 million.
That's 12.4% year-over-year earnings growth, and a net profit margin of 19%.
For the full year, sales from continuing operations were up 17.5% to R$14.2 billion, with net income of R$2.5 billion, also up 17.5%, and a net profit margin of 17.5%!
These numbers do not count the more than R$3billion StoneCo received from the sale of its Linx software assets last year. StoneCo noted it will use the sale proceeds to reinvest in its core businesses of "payments, banking, and credit, all reinforced by proprietary transaction data, deep distribution, disciplined underwriting, and end-to-end technology."
For the full year, StoneCo reported adjusted earnings per share of R$9.71 (USD 1.89), up 33.6% from 2024. And this number appears to include proceeds from the Linx sale.
Is StoneCo stock a sell?
How should investors read all the above? $1.89 per share in profit on a stock costing a bit under $14 per share is a P/E of about 7.3x. Granted, much of the profit came from the Linx sale, but with profits ex-that sale still rising at a 17.5% clip, StoneCo stock looks cheap to me today.
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Rich Smith has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends StoneCo. The Motley Fool has a disclosure policy.
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