Can STNE's Pix-Powered Deposit Growth Set the Stage for Profitability?

In the first nine months of 2025, StoneCo Ltd.’s (STNE) deposit growth was fueled by rising Pix (Brazilian instant payment ecosystem) usage, strategic bundling and its cash sweep strategy. Pix transaction volume surged 64% year over year, significantly outpacing card transaction growth. This shift was driven by Pix cannibalizing debit and cash usage. Higher Pix usage boosts client deposit flows, supporting broader financial service engagement and funding strategies. By the end of the third quarter of 2025, total client deposits reached R$9 billion, up 32% year over year. Deposits represented 7.1% of micro, small and medium-sized businesses’ total payment volume, and continued to grow faster than payment volumes

StoneCo advanced its cash sweep strategy, converting retail deposits into on-platform time deposits. The cash sweep migration began in early 2025. At the end of the third quarter of 2025, time deposits represented 84% of retail client deposits. Going forward, the cash sweep strategy is expected to yield 75-125 bps annual net benefit per R$1 billion converted going forward. The strategy supports reduced funding expenses, helping offset interest rate volatility and fueling credit portfolio growth. This shift supports improved margins and a stronger capital structure.

Together, these efforts in deposit scaling enhance client retention, enable cost-effective funding of the credit portfolio and contribute positively to profitability.

Key Competitors of STNE

Nu Holdings Ltd. (NU) accelerated deposit growth by the end of the third quarter of 2025, reaching $38.8 billion, up 34% year over year. This performance demonstrates Nu Holdings' ability to scale deposit volumes while simultaneously improving efficiency, reinforcing the strength of our funding model, and supporting the continued build-out of a scalable and sustainable deposit franchise across Latin America. Growth was broad-based across Latin America, with steady expansion in Colombia, strong inflows across all segments in Brazil, and resilient balances in Mexico despite lower deposit yields, highlighting the strength and sustainability of NU Holding’s deposit franchise.

Another fintech player, MercadoLibre, Inc. (MELI), is leveraging Pix to drive deposit scaling and financial engagement. MercadoLibre is driving deposit growth by offering attractive remuneration on balances to deepen user engagement and position Mercado Pago as a primary financial account. This boosted monthly active fintech users to 72 million, up more than 20% year over year, by the end of the third quarter 2025. High-yield accounts increased user loyalty, spending, and ecosystem activity, while strategic branding tied Mercado Pago closer to the broader MercadoLibre platform, reinforcing financial integration.

STNE’s Stock Price Performance, Valuation & Estimates

In the past year, shares of StoneCo have surged 76% compared with the industry’s growth of 3.9%.

STNE’s valuation looks attractive. The stock trades at a forward 12-month price-to-earnings (P/E) of 7.2X, lower than the industry average of 32.91X.

The Zacks Consensus Estimate for STNE’s earnings for 2025 and 2026 has been unchanged over the past 30 days.

Image Source: Zacks Investment Research

STNE stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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

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