StoneCo Gears Up to Report Q2 Earnings: What's in the Offing?

StoneCo Ltd. STNE is scheduled to report second-quarter 2025 results on Aug. 7, after market close. The company’s quarterly results are likely to display a year-over-year rise in revenues and earnings per share (EPS).

In the previous quarter, this Grand Cayman-based fintech company reported an EPS of 34 cents, beating the Zacks Consensus Estimate of 32 cents. Results reflected a year-over-year increase in total revenues and income. Total Payments Active Client base reached 4.4 million in the quarter, representing 4.3% sequential growth.

Over the preceding four quarters, STNE’s EPS surpassed the consensus estimate on three occasions and missed once, the average beat being 6.44%. This is depicted in the graph below:

StoneCo Ltd. Price and EPS Surprise

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

Factors at Play for StoneCo

StoneCo’s second-quarter performance is likely to have benefited from continued momentum in its primary sectors, notably within the financial services and software business.

STNE’s robust solutions in the financial services segment, particularly its MSMB (Micro, Small and Medium-sized Businesses) offerings, are likely to have been a key growth driver. With MSMB Total Payment Volume growth and higher take rates, this segment is expected to have delivered decent financial results in the to-be-reported quarter.

Strengthening efforts in enhancing its banking solutions for small and medium-sized businesses are expected to have contributed to banking revenues in the quarter to be reported.

StoneCo's credit offering through merchants and credit cards has shown significant growth. With low non-performing loan ratios and plans to extend the credit offerings to more clients, STNE is expected to have benefited from the continued expansion of its credit portfolio in the to-be-reported quarter.

STNE’s increasing focus on cost management approaches to boost profitability and operational efficiency is likely to have driven significant operating leverage in the to-be-reported quarter.

However, StoneCo’s second-quarter performance is likely to have been affected by increased competition from banks to serve Small and Medium Enterprises.

Q2 Projections for STNE

The Zacks Consensus Estimate for the quarterly revenues stands at $653.1 million, indicating an increase of 6.2% from the year-ago period’s reported figure.

STNE’s activities during the to-be-reported period were adequate to garner analysts’ confidence. The Zacks Consensus Estimate for quarterly EPS has been revised upward by 2 cents to 36 cents over the past month. It also suggests a 20% increase from the prior-year quarter’s reported figure.

What Our Quantitative Model Predicts for STNE

Our proven model predicts a surprise in terms of EPS for StoneCo this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an EPS beat, which is exactly the case here.

StoneCo currently has an Earnings ESP of +12.68% and sports a Zacks Rank of 1. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Other Stocks That Warrant a Look

Here are two stocks from the Internet software industry — Datadog DDOG and Nice NICE — that you may also want to consider, as our model shows that these have the right combination of elements to report a surprise this quarter.

DDOG, slated to release quarterly numbers on Aug. 7, has an Earnings ESP of +1.60% and carries a Zacks Rank of 2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Nice is slated to report quarterly numbers on Aug. 14. NICE has an Earnings ESP of +0.88% and carries a Zacks Rank of 3 at present.

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This article originally published on Zacks Investment Research (zacks.com).

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