What happened
Shares of StoneCo (STNE 0.32%), a Brazilian financial technology company that legendary investor Warren Buffett recently added to Berkshire Hathway's (BRK.A -0.28%) (BRK.B -0.68%) holdings, soared 35.2% in March, according to data from S&P Global Market Intelligence. The S&P 500 index returned 1.9% last month.
StoneCo stock's fortunes have reversed somewhat in April. Shares dropped 8.7% on Wednesday, April 3, following the company's announcement of a follow-on offering of 19.5 million shares at $40.50 per share. The proceeds from the sale are going to the selling shareholders, not the company. In other words, some early shareholders -- the company went public in October -- are taking some of their profits off the table. Nonetheless, the stock is up 110% in 2019 and up 60.4% from its initial public offering (IPO) price of $24 per share.
Image source: Getty Images.
So what
We can attribute StoneCo stock's stellar performance last month largely to the company reporting better-than-expected fourth-quarter results on March 18. The following day, the stock rocketed 18.4%.
For the quarter, as my colleague Matt Frankel reported, StoneCo's revenue more than doubled year over year to $137.6 million (in U.S. dollars), beating Wall Street's $117 consensus estimate. Earnings per share (EPS) came in at $0.27, more than double the $0.13 analysts were expecting. Drivers behind these robust results included total payment volume surging 74% year over year and adjusted net margin jumping to 29.5% from 8.4% in the year-ago period.
Data by YCharts.
Now what
On April 1, StoneCo announced preliminary first-quarter 2019 results. In terms of the Brazilian real, it expects about a 60% year-over-year increase in payment volume and roughly 85% and 600% jumps in revenue and net income, respectively.
For the year, Wall Street is expecting StoneCo to grow revenue and EPS 62% and 114%, respectively, year over year.
