StoneCo Gears Up to Report Q3 Earnings: What's in the Offing?

Core Insights - StoneCo Ltd. is expected to report third-quarter 2025 results on November 6, with anticipated year-over-year increases in revenues and earnings per share (EPS) [1][8] Financial Performance - In the previous quarter, StoneCo reported an EPS of 39 cents, exceeding the Zacks Consensus Estimate of 36 cents, with total revenue and income showing year-over-year growth [2] - The total Payments Active Client base reached 4.6 million, reflecting a 5.1% sequential growth [2] - The Zacks Consensus Estimate for quarterly revenues is projected at $700.7 million, indicating a 15.7% increase from the same period last year [7] - The EPS estimate has been revised upward by 2 cents to 43 cents, suggesting a 22.9% increase from the prior-year quarter [7] Growth Drivers - StoneCo's performance is likely to benefit from strong momentum in its financial services and software business sectors [3] - The MSMB (Micro, Small and Medium-sized Businesses) segment is expected to be a key growth driver, with growth in Total Payment Volume and higher take rates [4] - Enhancements in banking solutions for small and medium-sized businesses are anticipated to contribute positively to banking revenues [5] - The credit offering through merchants and credit cards has shown significant growth, with low non-performing loan ratios and plans for expansion [5] Operational Efficiency - The company's focus on cost management is likely to enhance profitability and operational efficiency, driving significant operating leverage [6] - However, increased competition from banks serving Small and Medium Enterprises may pose challenges [6] Earnings Prediction - The model predicts a positive surprise in EPS for StoneCo, supported by a positive Earnings ESP of +7.81% and a Zacks Rank of 1 (Strong Buy) [8][9]