StoneCo Ltd. (STNE) DCF Valuation & Fundamental Primer
StoneCo Ltd. (STNE) currently trades at — with an enterprise value of $-292.14B. Our proprietary institutional model rates StoneCo Ltd. at 51/100 (Grade: B · Mixed Fundamental Profile).
Institutional fundamental teardown of StoneCo Ltd. (STNE) covering SEC 10-K/10-Q cash flow conversion, SBC dilution friction, and Reverse-DCF valuation hurdles.
StoneCo Ltd. (STNE) 3-Scenario DCF Valuation Range
Stress-test STNE's 5-year growth, target FCF margin, WACC, terminal methodology, and SBC/dilution friction in real time.
Split between 5-Year Explicit Cash Flows and Discounted Terminal Value
2D Institutional Valuation Sensitivity Heatmap
Implied share price & upside/downside spread across 25 valuation states (Current Price: —).
| WACC \ Terminal | 1.5% | 2.0% | 2.5% | 3.0% | 3.5% |
|---|---|---|---|---|---|
| 8.5% | $295.21 N/M | $317.13 N/M | $342.70 N/M | $372.92 N/M | $409.19 N/M |
| 9.3% | $259.88 N/M | $277.14 N/M | $296.97 N/M | $319.97 N/M | $346.96 N/M |
| 10.0% | $230.88 N/M | $244.77 N/M | $260.50 N/M | $278.48 N/M | $299.23 N/M |
| 10.8% | $206.68 N/M | $218.03 N/M | $230.76 N/M | $245.13 N/M | $261.48 N/M |
| 11.5% | $186.19 N/M | $195.61 N/M | $206.06 N/M | $217.75 N/M | $230.90 N/M |
Institutional Software Quality Scorecard (51/100 · Grade B)
Viable recurring software business but carries notable dilution, lower margins, or higher leverage.
Negative free cash flow; business consumes cash to sustain operations
Minimal dilution friction; management compensation aligned with shareholders
Solid gross margins with potential for operating leverage at scale
Leveraged balance sheet coupled with cash burn; heightened refinancing risk
Core Investment Strengths & Moats
- Low dilution friction: SBC is only 1.8% of revenue
Key Operational & Dilution Risks
- Negative free cash flow burn of $-4.89B over trailing twelve months
- Balance sheet vulnerability: Net debt of $7.67B while operating with cash burn
StoneCo Ltd. (STNE) 5-Year Fundamental Forecast
| Statement Line Item | TTM Audited Base | TTM | Y1 | Y2 | Y3 | Y4 | Y5 |
|---|---|---|---|---|---|---|---|
| Revenue | $12.74B | $12.74B | $18.04B | $25.55B | $36.18B | $51.24B | $72.57B |
| Gross Profit | $9.35B | $9.35B | $13.24B | $18.75B | $26.56B | $37.61B | $53.27B |
| Operating Income (EBIT) | $5.88B | $5.88B | $8.33B | $11.80B | $16.71B | $23.66B | $33.51B |
| Stock-Based Compensation (SBC) | $232.7M | $233.1M | $330.2M | $467.6M | $662.2M | $937.8M | $1.33B |
| Unlevered Free Cash Flow (FCF) | $-4.89B | $-4.89B | $-6.93B | $-9.81B | $-13.90B | $-19.68B | $-27.87B |
| SBC-Adjusted True Cash Flow | $-5.13B | $-5.13B | $-7.26B | $-10.28B | $-14.56B | $-20.62B | $-29.20B |
Software & Cloud Services Peer Comparables & Rule of 40 Regression
Rule of 40 vs. EV / Revenue Multiple Regression
OLS Fit: EV/Rev = -30.2 + 0.82 × (Rule of 40) · R² = 79%Stocks below the gold regression line trade at a discount relative to their Rule of 40 compounding efficiency.
| Company | Ticker | Market Cap | TTM Revenue | Gross Margin | FCF Margin | Rule of 40 | SBC % Rev | EV / Rev |
|---|---|---|---|---|---|---|---|---|
| StoneCo Ltd. | STNE | — | $12.74B | 73.4% | -38.4% | 3.2% | 1.8% | — |
| ServiceNow | NOW | $152.61B | $10.98B | 79.2% | 31.1% | 54.2% | 15.9% | 13.9× |
| Workday, Inc. | WDAY | $50.35B | $8.00B | 75.0% | 27.4% | 43.9% | 19.0% | 6.4× |
| Salesforce | CRM | $217.10B | $37.90B | 77.2% | 32.8% | 42.8% | 8.4% | 5.8× |
| Datadog | DDOG | $46.05B | $2.68B | 80.8% | 31.1% | 57.7% | 21.3% | 17.4× |
| Snowflake Inc. | SNOW | $71.79B | $3.63B | 66.5% | 25.2% | 57.7% | 40.8% | 20.0× |
| Hubspot | HUBS | $19.89B | $2.63B | 85.0% | 21.3% | 52.7% | 19.2% | 7.7× |
| Peer Cohort Median Benchmark (N=6) | 78.2% | 29.2% | 53.5% | 19.1% | 10.8× | |||
EV / Revenue Multiple Compression Stress Test
| Multiple Scenario | EV / Revenue | Implied Enterprise Value | Implied Equity Value | Implied Share Price | Delta vs Current |
|---|---|---|---|---|---|
| Current Multiple | 1.1× | $14.23B | $6.56B | $25.00 | 0.0% |
| -20% Multiple Compression | 0.9× | $11.38B | $3.71B | $14.15 | -20.0% |
| -35% Multiple Compression | 0.7× | $9.25B | $1.58B | $6.02 | -35.0% |
| Software Baseline Floor (5.0× EV/Rev) | 5.0× | $63.70B | $56.03B | $213.56 | +347.7% |
Frequently Asked Questions: StoneCo Ltd. (STNE) Valuation
What is StoneCo Ltd. (STNE)'s intrinsic DCF valuation and implied share price?
Based on audited SEC 10-K/10-Q filings and a 5-year 3-statement discounted cash flow (DCF) model, StoneCo Ltd. (STNE) has a Base Case implied value of N/A per share (with a Bear Case of N/A and a Bull Case of N/A), compared to its current price of market price. The model discounts projected free cash flows at a 10.0% WACC and a 2.5% terminal growth rate.
What is StoneCo Ltd. (STNE)'s Rule of 40 score and Free Cash Flow margin?
StoneCo Ltd. achieves a Rule of 40 score of 3.2%, combining a 41.6% revenue growth run-rate with a -38.4% TTM free cash flow margin on $12.74B in trailing twelve-month revenue. In the Software & Cloud Services peer cohort, the median Rule of 40 benchmark is 53.5%.
What revenue growth rate is priced into STNE stock according to Reverse-DCF analysis?
At market price per share (Enterprise Value of N/A), our Reverse-DCF solver indicates the market is pricing in a 5-year implied revenue CAGR of 41.6%, compared to StoneCo Ltd.'s historical CAGR of 41.6%. Overall market expectations are rated as "Fairly Priced to Fundamentals".
How does StoneCo Ltd. compare to Software & Cloud Services software peers?
StoneCo Ltd. (STNE) earns an institutional Software Quality Score of 51/100 (Grade B — Mixed Fundamental Profile). Across its Software & Cloud Services peer group (NOW, WDAY, CRM, DDOG, SNOW), the cohort trades at a median EV/TTM Revenue multiple of 10.8× and a median gross margin of 78.2%.
How does Stock-Based Compensation (SBC) impact StoneCo Ltd. (STNE)'s valuation?
StoneCo Ltd. recorded $232.7M in TTM stock-based compensation (1.8% of revenue). When treating SBC as a cash-equivalent compensation expense, StoneCo Ltd.'s SBC-adjusted free cash flow yield is evaluated directly in our 3-statement model, scoring 25/25 on our Shareholder Dilution Friction pillar.