StoneCo offers a high-beta deep-value recovery story: a sticky Brazilian MSMB fintech platform trading cheaply while management pivots toward ROE, credit discipline and aggressive capital returns.
Overview
StoneCo is a core infrastructure player in Brazil’s fintech ecosystem, serving millions of underserved MSMBs with payments, banking, credit and software tools. Its differentiated Hub-based service model builds trust and retention while generating transaction data for financial products. After selling Linx, StoneCo is simplifying around higher-return financial services and returning substantial capital through dividends and buybacks. The thesis is compelling but macro-sensitive: high rates, credit risk and competition remain meaningful, while strong ROE, liquidity, and a sticky merchant base support upside.