StoneCo Ltd Stock

In looking at the financials of StoneCo Ltd. (NASDAQ: STNE), operating within the Software & IT Services industry, the company appears to be quite steady with significant growth in their total assets over the past few years. However, there also seems to be a substantial increase in liabilities and fluctuating net income. In the following paragraphs, a detailed analysis of the company's financial statements will uncover notable pros and cons and, determine the overall health of the business.

Growth in Total Assets: StoneCo's total assets have shown a considerable increase over the past few years. For instance, total assets stood at BRL 31.75 billion in 2020, rose to BRL 42.06 billion in 2021, and further increased to BRL 42.25 billion by December 2022. A continued growth in total assets implies that the company is extending its economic resources, which may be beneficial for its future performance.

Expansion of Gross Profit: Another positive sign for StoneCo is the consistent increase in gross profit across the years. The company's gross profit was BRL 2.41 billion in 2020, BRL 2.86 billion in 2021, and reached BRL 6.35 billion by December 2022. An expanding gross profit demonstrates the company's capability to generate revenue with relatively lower costs of goods sold, indicating operational efficiency.