StoneCo (STNE) to Report Q3 Earnings: What's in the Cards?

StoneCo Ltd. STNE is set to report third-quarter 2019 results on Nov 21.

For the quarter, the Zacks Consensus Estimate for earnings has been steady at 18 cents over the past 30 days, indicating 80% growth from the year-ago quarter.

The consensus mark for revenues is currently pegged at $131.4 million, which implies 25% growth from the figure reported in the year-ago quarter.

The company beat the Zacks Consensus Estimate in three of the trailing four quarters, the average positive surprise being 10%.

StoneCo Ltd. Price and EPS Surprise


StoneCo Ltd. Price and EPS Surprise

StoneCo Ltd. price-eps-surprise | StoneCo Ltd. Quote

In second-quarter 2019, StoneCo reported adjusted earnings of 18 cents per share, which beat the Zacks Consensus Estimate by 5.9%.

Let’s see how things have shaped up prior to this announcement.

Factors to Consider

StoneCo’s addition of features and capabilities to its platform to help clients better manage business has been aiding client base expansion and improved loyalty.

Reflective of this, second-quarter 2019 total active clients jumped 79.5% year over year. Net client addition was 50.5 thousand.

StoneCo’s software client base is expected to have been boosted by increased cross-selling opportunities. Further, inclusion of new solutions in the areas of banking and credit has been well received.

Per management, the number of subscribed clients in software increased from 32K at the end of first-quarter 2019 to roughly 70K in July 2019. The third-quarter revenues are expected to reflect the same.

Q3 Development

On Jul 30, StoneCo announced a joint venture with Grupo Globo that focuses on serving micro merchants.

What Our Model Says

According to the Zacks model, a company with a positive Earnings ESP along with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has a good chance of beating estimates.

StoneCo has a Zacks Rank #2 and an Earnings ESP of 0.00%, which makes surprise prediction difficult. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stocks to Consider

Here are some companies, which, per our model, have the right combination of elements to post an earnings beat this quarter:

Adobe Systems ADBE has an Earnings ESP of +0.12% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Okta OKTA has an Earnings ESP of +1.82% and a Zacks Rank #3.

Momo MOMO has an Earnings ESP of +3.94% and a Zacks Rank #3.

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