STNE
StoneCo Ltd.
$12.28
High-Growth Software
80%
Revenue × Terminal Margin DCF
Strong
·
Conviction
Undervalued
Trading 88.1% below fair value
You pay
$12.28
Bear
$37.33
Fair
$102.94
Bull
$154.93
Bear
$37.33
+204.1%
18% rev growth, 17% terminal margin
Fair
$102.94
+738.6%
30% rev growth, 23% terminal margin
Bull
$154.93
+1162.1%
35% rev growth, 26% terminal margin
Adjust Assumptions
30.0%
23.0%
12.0%
Key Value Driver
Revenue growth (30%) × margin expansion to 23%
Terminal Value % of EV
63%
Implied Market Multiple
1.9x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (21 analysts)
$13.65
Divergence from AlphaVal
654%
Summary
Projecting 30% revenue growth with FCF margins expanding from 11% to 23% over 10 years, discounted at 12%, the base-case value is $102.94 per share.
Warnings
Gross margin of 76% means each dollar of revenue is highly profitable. As the company grows, overhead costs should shrink as a share of revenue, boosting overall profits.
Wall Street's average price target is $13.65 (from 21 analysts). Our estimate is 654% above the consensus -- consider that gap carefully.
Financial statements were converted from BRL into USD using USDBRL at 0.2007 USD per BRL.
Key Risks
- Current FCF misleads — the model values future margins, not today's cash
- SBC dilution is the hidden tax: 2-4% annual share growth compounds fast
- Revenue deceleration is inevitable — the question is when and how steep