Equity Snap: StoneCo (STNE US) Inline 1Q26 but multiple challenges undergoing a fix

Research evidence excerpt

Equity Snap: StoneCo (STNE US) Inline 1Q26 but multiple challenges undergoing a fix

14 May 2026

Equity Snap: StoneCo (STNE US) Equities Diversified Financial Srvcs

Inline 1Q26 but multiple challenges undergoing a fix Brazil

◆ Cost control aids 1Q26 earnings; churn further dampens Neha Agarwala, CFA

volume growth that has been ailing from to a tough macro Analyst, LatAm Financials & Fintech HSBC Securities (USA) Inc.

neha.agarwala@us.hsbc.com

◆ Loan book is undergoing a learning curve; worsening of asset +1 212 525 5418

quality slightly hurts confidence Carlos Gomez-Lopez, CFA

Head of EM and LatAm Financials

HSBC Securities (USA) Inc.

carlos.gomezlopez@us.hsbc.com

StoneCo (STNE US, USD9.70, Buy, TP USD17.35) +1 212 525 5253

(Priced as of 14 May 2026)

Stacey Sun*

EM Financials Analyst

1Q26 inline; but churn and asset quality hurt: Stone reported a recurring IFRS net HSBC Bank plc

income of BRL530m in 1Q26 while non-recurring related to amortization of goodwill stacey.sun@hsbc.com

+44 203 2685810

from Linx acquisition (page 2); pre-tax earnings came largely in line with HSBC and

consensus estimates. Volumes remained soft partly due to merchant churn, which

* Employed by a non-US affiliate of HSBC Securities (USA) Inc, and is

management is tackling by simplifying offering and reducing friction; already seeing not registered/ qualified pursuant to FINRA regulations

encouraging initial signs. Although the book is small, asset quality worsened driven by

macro, underperforming credit model as well as some isolated cases; focus on secured

working capital loans along with recently implemented underwriting changes are

showing positive initial signs with first payment defaults slowly normalizing but it doesn’t