New Street: STNE US (Neutral, TP: $50, +57%) StoneCo Q3s - Quick Take: Hubs OK; Credit, Linx and margin concerns linger
StoneCo reported Q3s after close. Revenue beat depressed consensus expectations, although missed at net income. Momentum in the Hubs was solid, though visibility on the return of Credit origination in scale is lacking, whilst Linx investments are adding to the margin squeeze brought by high CDI. Getting net margins up from the 9% level in Q3 will depend on the effectiveness of price increases applied from November.
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